SAINT LOUIS UNIVERSITY SCHOOL OF LAW
SWEDEN, SINGAPORE, AND THE STATES: A COMPARATIVE
ANALYSIS OF THE IMPACT OF TAXATION ON THE WELFARE OF
WORKING MOTHERS
NANCY SHURTZ*
INTRODUCTION .................................................................................................... 1088 I. TAX CULTURE AND POLICY ............................................................................. 1093 A. Sweden .................................................................................................. 1098 1. Direct Subsidies............................................................................... 1100 2. Vertical Equity ................................................................................ 1101 a. Tax Base ................................................................................... 1101 b. Tax Rates.................................................................................. 1102 3. Tax Unit .......................................................................................... 1103 B. Singapore................................................................................................ 1105 1. Direct Subsidies............................................................................... 1107 2. Vertical Equity ................................................................................ 1107 a. Tax Base ................................................................................... 1108 b. Tax Rates.................................................................................. 1108 3. Tax Unit .......................................................................................... 1109 C. United States........................................................................................... 1111 1. Direct Subsidies............................................................................... 1114 2. Vertical Equity ................................................................................ 1115 a. Tax Base ................................................................................... 1115 b. Tax Rates.................................................................................. 1122 3. Tax Unit .......................................................................................... 1124 II. LESSONS LEARNED: U.S. AGENDA FOR REFORM ............................................ 1125 A. Lessons from Sweden: Direct Subsidies and a Focus on Equity ............ 1125 B. Lessons from Singapore: An Efficient Tax System with
Comprehensive Base and Care Subsidies............................................... 1126 C. Additional Macro Proposals .................................................................. 1127 1. Tax Base .......................................................................................... 1127 2. Tax Rates ......................................................................................... 1130 3. Tax Unit .......................................................................................... 1130 D. Micro Proposals ..................................................................................... 1132 CONCLUSION ....................................................................................................... 1132 * Nancy E. Shurtz, Professor of Law, Bernard A. Kliks Chair, University of Oregon School of
Law. I would like to think Autumn Nicole Grant, Autumn Johnson, and Tawnya Madsen for
their research help on this Essay.
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INTRODUCTION
Many scholars have studied the topic of tax culture and policy in a variety
of countries across the world.1 Few have compared how different countries’
tax policies impact families2 or have developed tax criteria that assess the
impact of those policies on working mothers.3 I chose to study working
1. E.g., JULIAN ALWORTH ET AL., THE TAXATION OF INCOME FROM CAPITAL: A
COMPARATIVE STUDY OF THE UNITED STATES, THE UNITED KINGDOM, SWEDEN, AND WEST
GERMANY (Mervyn A. King & Don Fullerton eds., 1984); HUGH J. AULT ET AL., COMPARATIVE
INCOME TAXATION: A STRUCTURAL ANALYSIS (2d ed. 2004); SVEN STEINMO, TAXATION AND
DEMOCRACY: SWEDISH, BRITISH AND AMERICAN APPROACHES TO FINANCING THE MODERN
STATE (1993); VICTOR THURONYI, COMPARATIVE TAX LAW (2003); William B. Barker,
Expanding the Study of Comparative Tax Law to Promote Democratic Policy: The Example of
the Move to Capital Gains Taxation in Post-Apartheid South Africa, 109 PENN. ST. L. REV. 703
(2005); Carlo Garbarino, An Evolutionary Approach to Comparative Taxation: Methods and
Agenda for Research, 57 AM. J. COMP. L. 677 (2009); Tracy A. Kaye, Tax Discrimination: A
Comparative Analysis of U.S. and EU Approaches, 7 FLA. TAX REV. 47 (2005); Michael A.
Livingston, From Milan to Mumbai, Changing in Tel Aviv: Reflections on Progressive Taxation
and “Progressive” Politics in a Globalized but Still Local World, 54 AM. J. COMP. L. 555 (2006);
Jeffrey Owens, Fundamental Tax Reform: An International Perspective, 59 NAT’L TAX J. 131
(2006).
2. Several articles have explored the comparative tax treatment of families. See
Allessandro Cigno, Comparative Advantage, Observability, and the Optimal Tax Treatment of
Families with Children, 8 INT’L TAX & PUB. FIN. 455 (2001); Louise Dulude, Taxation of the
Spouses: A Comparison of Canadian, American, British, French and Swedish Law, 23 OSGOODE
HALL L.J. 67 (1985); Ayla A. Lari, Sharing Alike: French Family Taxation as a Model for
Reform, 37 DUQ. L. REV. 207 (1999); Stephanie Hunter McMahon, Tax Filing in the U.K.: A
Guide for the U.S. When Eliminating the Marriage Penalty, 55 ST. LOUIS U. L.J. 159 (2010); Joel
S. Newman, Taxation of Households: A Comparative Study, 55 ST. LOUIS U. L.J. 129 (2010).
There are quite a few articles comparing family law aspects of concern to working mothers.
See Richard N. Block, Work-Family Legislation in the United States, Canada, and Western
Europe: A Quantitative Comparison, 34 PEPP. L. REV. 333 (2007); Nancy E. Dowd, Envisioning
Work and Family: A Critical Perspective on International Models, 26 HARV. J. ON LEGIS. 311
(1989); Saul Levmore, Parental Leave and America Exceptionalism, 58 CASE W. RES. L. REV.
203 (2007); Linda A. White, The United States in Comparative Perspective: Maternity and
Parental Leave and Child Care Benefits Trends in Liberal Welfare States, 21 YALE J.L. &
FEMINISM 185 (2009); Anthea Williams, Public Law Models for the Implementation of Paid
Parental Leave, 19 N.Z. U. L. REV. 377 (2001); Michele Ashamalla, Note, A Swedish Lesson in
Parental Leave Policy, 10 B.U. INT’L L.J. 241 (1992); Anne Lofaso, Comment, Pregnancy and
Parental Care Policies in the United States and the European Community: What Do They Tell Us
About Underlying Societal Values?, 12 COMP. LAB. L.J. 458 (1991).
3. Janet G. Stotsky, Gender Bias in Tax Systems, 14 TAX NOTES INT’L 1913, 1913 (1997).
See generally Grace Blumberg, Sexism in the Code: A Comparative Study of Income Taxation of
Working Wives and Mothers, 21 BUFF. L. REV. 49 (1971); Dulude, supra note 2, at 70; Edward
McCaffery, Where’s the Sex in Fiscal Sociology? Taxation and Gender in Comparative
Perspective 6–8 (USC Center in Law, Economics and Organization, Research Paper No. CO7-12,
2008), available at http://papers.ssrn.com/sol3papers.cfm?abstract_id=1020360.
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mothers4 because mothers are “derivatively” dependent,5 that is to say,
children depend on their mothers for care, and when mothers must work, they
are caught in a “double bind.”6 On the one hand, mothers physically bear the
child and assume the primary responsibility for care giving.7 On the other
hand, they must earn the money8 to buy the food, shelter, health, and other
necessities for themselves and their children.9 In addition, I chose mothers
4. Gender neutrality seems to be the “preferred norm,” but it may “reinforce a false sense of
objectivity” and “raise the risk of essentialism.” Nancy E. Dowd, Women’s, Men’s and
Children’s Equalities: Some Reflections and Uncertainties, 6 S. CAL. REV. L. & WOMEN’S STUD.
587, 588 (1997). I chose to study mothers rather than parents or families; however, I do not want
to leave children out of my discussion either. I found that many studies on families do not
address some of the most important issues to women, such as domestic violence.
5. MARTHA ALBERTSON FINEMAN, THE NEUTERED MOTHER, THE SEXUAL FAMILY AND
OTHER TWENTIETH CENTURY TRAGEDIES 39–41 (1995).
6. Margaret Jane Radin, The Pragmatist and the Feminist, 63 S. CAL. L. REV. 1699, 1704
(1990).
7. Mothers still have the primary responsibility for child care and housework in the home.
“[E]mployed fathers in most OECD countries devote fewer than one-quarter of the hours that
their female partners commit to routine housework.” Janet C. Gormick & Marcia K. Meyers,
Creating Gender Egalitarian Societies: An Agenda for Reform, 36 POL. & SOC’Y 313, 317
(2008). Time-use studies in the United States indicate that “employed mothers do less of
everything else; they spend seven fewer hours per week on housework, six fewer hours sleeping,
five fewer hours on personal care, and twelve fewer hours on leisure activities than their
nonemployed counterparts.” Id. at 318. “Men have failed to make a corresponding shift in the
amount of time and attention that they devote to caregiving.” Id. at 317.
8. The majority of children now grow up in single-parent or two-parent families where both
adults work. See Gormick & Meyers, supra note 7, at 316 (indicating that across thirty OECD
countries, 71% of mothers with one child and 62% of mothers with two or more children work; in
the United States almost 70% of mothers work; and in Sweden over 80% of mothers work). In
the United States approximately 30% of children grow up in single family households; 23% of
children grow up in a single family household headed by the mother. See Marian Wright
Edelman, A National Family Portrait, HUFFINGTON POST (July 29, 2011), http://www.huffington
post.com/marian-wright-edelman/a-national-family-portrai_b_913729.html.
However, mothers are employed fewer hours than fathers and are paid less. Due to leaves,
career breaks, job choices, and employer discrimination, mothers bear a “mommy tax.” Mothers
share of parental earnings in a dual-parent household is about 28% in the United States and in the
high thirtieth percentile in Sweden. Gormick & Meyers, supra note 7, at 318. Single mothers’
earnings are among the lowest. See TIMOTHY S. GRALL, U.S. CENSUS BUREAU, CURRENT
POPULATION REPORTS: CUSTODIAL MOTHERS AND FATHERS AND THEIR CHILD SUPPORT: 2007,
at 10 (2009). Around 31% of all single parents receive public assistance and 4% receive
Temporary Assistance for Needy Families. Id. at 1.
9. Lower-income families spend about 23% of their incomes on child care. Mary L. Heen,
Welfare Reform, Child Care Costs, and Taxes: Delivering Increased Work-Related Child Care
Benefits to Low-Income Families, 13 YALE L. & POL’Y REV. 173, 195 n.142 (1995). Family
expenses in the United States vary based on geography. A single parent with two children needs
to earn $15 an hour to afford basic necessities in a rural area of New Mexico, $20 an hour in Des
Moines, and $27 an hour in San Francisco. KINSEY ALDEN DINAN, NAT’L CTR. FOR CHILDREN
IN POVERTY, BUDGETING FOR BASIC NEEDS: A STRUGGLE FOR WORKING FAMILIES 3 (2009);
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because of their important connection to children—valuable public goods and
the human capital of the future.10
This paper is the beginning of an exploration of the multitude of tax factors
that impact the welfare of working mothers. I select three countries which I
think exemplify three different and distinct approaches to working mothers’
welfare—Sweden, which adopts a “state-support” system;11 Singapore, which
adopts a “class/caste” approach;12 and the United States, which largely adheres
to a “personal responsibility” model.13 I chose these three countries because of
their differing approaches to working mothers’ welfare, as well as their distinct
political, cultural, legal, and tax differences. I will consider each country’s
“tax culture,” and the effect of the country’s tax and spending policies on
working mothers’ welfare.
I chose Sweden because of all the socialist countries it has the most
favorable and transformative family leave policy.14 Sweden also has a large
see also GARY ORFIELD, UCLA CIVIL RIGHTS PROJECT, THE FUTURE DEPENDS UPON SINGLE
MOMS: A POLICY ANALYSIS INCLUDING DATA FROM THE TOP TEN METROPOLITAN AREAS 7
(2009).
10. Raising healthy children should be a national priority. See, e.g., Paula England & Nancy
Folbre, Who Should Pay for the Kids?, 563 ANNALS AM. ACAD. POL. & SOC. SCI. 194 (1999)
(arguing that well-reared children are public goods because of their capacity to benefit society as
a whole); Nancy Folbre, Children as Public Goods, 84 AM. ECON. REV. 86 (1994). One very
important economic benefit of children is that their income from their wages will help provide
retirement benefits for the elderly.
11. Sweden sees its role as reducing economic inequity, gender inequity and providing
support of children who they see as a public good or valuable social citizens. See Gregg M.
Olsen, Toward Global Welfare State Convergence?: Family Policy and Health Care in Sweden,
Canada and the United States, J. SOC. & SOC. WELFARE, June 2007, at 143, 145 (asserting that
Sweden’s welfare state “covers a wider range of social contingencies than most nations and
provides generous social transfers and a dense network of high quality social services”).
12. Singapore supports working moms through a massive “guest worker” program which
essentially provides many households with a maid or nanny. These guest workers have low
wages, few rights and support from the state. See Brenda S.A. Yeoh & Kavitha Annadhurai,
Civil Society Action and the Creation of “Transformative” Spaces for Migrant Domestic Workers
in Singapore, 37 WOMEN’S STUD. 548, 549 (2008). See also Brenda S.A. Yeoh et al., Migrant
Female Domestic Workers: Debating the Economic, Social and Political Impacts in Singapore,
33 INT’L MIGRATION REV. 114, 117 (1999); Brenda S.A. Yeoh & Shirlena Huang, Singapore
Women and Foreign Domestic Workers: Negotiating Domestic Work and Motherhood, in
GENDER, MIGRATION AND DOMESTIC SERVICE 277, 279 (Janet Henshall Momsen ed., 1999).
13. Working mothers in America are responsible for child care, pre-school, college expenses
as well as work-related expenses, such as commuting, work clothes, and meals. Olsen, supra
note 11, at 145 (stating “[t]he restricted nature of the U.S. welfare state reflects a commitment to
a narrow conception of equal opportunity, a negative expression of liberty—freedom from the
state—and limited government, helping to explain its higher levels of poverty and smaller middle
class”).
14. See Katrin Bennhold, In Sweden, Men Can Have It All, N.Y. TIMES, June 9, 2010,
available at www.nytimes.com/2010/06/10/world/europe/10iht-sweden.html.
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number of women in powerful governmental positions15 and was ranked
number one on the Gender Gap Index in the year I started researching this
paper.16 Sweden has a family-friendly tax system with high progressive rates,
a comprehensive base, and an individual unit.17 It also has a large number of
direct, rather than tax, subsidies.18
I chose Singapore because it has one of the lowest fertility rates of any
country in the world,19 yet one of every seven households has a maid or
nanny.20 Singapore also seems economically comparable to the United States,
with one of the highest standards of living in Asia.21 Singapore’s taxes are
low, fair, and simple with a mandated savings system, much like our own
Social Security system.22
Part I of my Essay explores the “tax culture” of each of the three countries.
I define “tax culture” as the values and beliefs embodied in the various taxing
systems and provisions of the country. Although all tax cultures have as their
purposes supplying adequate revenue, achieving a practical system, and
accomplishing political order; they vary in their goals of horizontal equity,
reducing economic equality, encouraging market work, and providing specific
support for working mothers and their children. In this Essay I try to prioritize
15. Women hold nearly half of the parliamentary, ministerial, and municipal positions. See
Gender Equality in Sweden, SWEDEN.SE: THE OFFICIAL GATEWAY TO SWEDEN, http://www.swe
den.se.eng/home/society/equality/facts/gender-equality-in-Sweden/ (last visited Sept. 19, 2010).
16. Sweden is now number four after Iceland, Finland, and Norway. RICARDO HAUSMANN
ET AL., WORLD ECON. FORUM, THE GLOBAL GENDER GAP REPORT: 2009, at 8 (2009), available
at http://www.weforum.org/en/Communities/Women%20Leaders%20and%20Gender%20Parity/
GenderGapNetwork/index.htm. See Table 3a for comparisons. Id. at 8–9. The report covers 134
countries and over 90% of the world’s population. Id. at 7. The four major categories examined
were: 1) economic participation and opportunity; 2) educational attainment; 3) political
empowerment; and 4) health and survival. Id. at 4. The United States ranked thirty-first overall,
and Singapore ranked eighty-fourth. Id. at 8, 9.
17. See infra Part I.A.2–3.
18. See infra Part I.A.1.
19. Singapore has 1.1 births per woman. The World Factbook, Singapore, CENT.
INTELLIGENCE AGENCY, https://www.cia.gov/library/publications/the-world-factbook/geos/
sn.html (follow “People” hyperlink; then follow “Total Fertility Rate” hyperlink) (last visited Oct.
13, 2010) [hereinafter CIA WORLD FACTBOOK]. This is despite state and tax policies that
encourage children. For example, the Parenthood Tax rebate encourages citizens of Singapore to
have children and the rebate increase from $5,000 for the first born after 2009 to $20,000 for the
third and beyond born after 2009. Parenthood Tax Rebate, INLAND REVENUE AUTH. SING.,
http://www.iras.gov.sg/irasHome/page04.aspx?id=1528 (last visited Sept. 30, 2010).
20. Yeoh & Annadhurai, supra note 12, at 549. The statistics vary; some say one-in-eight
and some say one-in-seven households. Id.
21. See Cost of Living, SING. EDUC., http://www.singaporeedu.gov.sg/htm/liv/liv 01.htm
(last visited Jan. 11, 2011).
22. Rowan Callick, The Singapore Model, THE AMERICAN (May 27, 2008), http://www.am
erican.com/archive/2008/may-june-magazine-contents/the-singapore-model.
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the tax features most important to working mothers’ welfare. Spending
policies, as well as macro tax concepts, such as the tax base, progressive
taxation, and the taxable unit are considered. Specific tax policies, such as
those involving children and childcare, housing, earned income, retirement,
and education may also be relevant.
Part II of this Essay discusses lessons learned from Sweden and Singapore,
and explores proposals to optimize the tax system in the United States so that it
can be more supportive of working mothers. First, because working mothers
spend a disproportionate part of their income on consumption and often do not
adequately save, I make several suggestions as to the tax base, including: 1)
moving away from the current hybrid income tax system with fewer subsidies
for savings; 2) providing more subsidies for the consumption items important
to working moms; 3) limiting the subsidies for the consumption items of the
wealthy; and 4) taxing capital gains and dividends the same as earned income.
Second, because working mothers earn less in the marketplace, I also suggest
ways to make our tax system more progressive: 1) by increasing the federal
income tax rates; 2) by making the Social Security system less regressive; and
3) by providing a refundable credit for “regressive state tax regimes”—those
using flat-rate consumption taxes that heavily tax household and child/work
related items. Third, to eliminate adverse marriage penalties and incentives to
stay at home, I advocate changing our marital taxing unit and requiring the
imposition of mandatory individual filing. In the alternative, I recommend
allowing married couples who file separately to file as singles, and head of
households to be taxed as married. I also propose the doubling of the
eligibility rules and phase-outs for head of household working moms. Fourth,
because working moms often spend considerable time doing both market work
and housework, transferring some of these functions to the state (or to their
partners or other family members) would be greatly beneficial to their welfare.
Although providing universal health care is a good first step, I suggest we
provide more direct subsidies that would be of importance to working moms,
such as universal preschool.
To the extent the United States is more likely to adopt tax subsidies, rather
than direct subsidies, I propose the following specific tax provisions: 1) a
family allowance for all lower and middle income head of household working
moms to address the negative income resulting from child care responsibilities;
2) an across-the-board “support” credit for moms in two-earner households or
head of household working moms—those who have to incur increased
transportation, meals, and clothing expenses for work; 3) a “welfare mom’s
working opportunity credit” for those hiring welfare moms (with
accompanying children) as nannies; and 4) institution of a refundable “rent”
credit to subsidize rent expenses for low income head of household moms. Of
course, tax culture is just one part of the larger legal and social environment of
which working mothers are a part. However, tax policy can be instrumental in
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addressing certain equity issues and in providing support to those who sacrifice
for the common good.23
I. TAX CULTURE AND POLICY
What is tax culture? Tax culture has been defined as “the body of beliefs
and practices that are shared by tax practitioners and policy-makers in a given
society and thus provide the background or context in which substantive tax
decisions are made.”24 Tax culture has generally been assessed according to a
variety of traditional tax policy criteria: supplying adequate revenue, achieving
a practical system, imposing equal taxes, reducing economic inequality, and
accomplishing political order.25 The tax culture should be assessed by
examining all the taxing systems—federal, state, and local—of a country, as
well as examining specific micro criteria.26
When assessing the impact of a country’s tax culture on working mothers,
it is important to reframe these traditional tax policy criteria based on the
economic and social circumstances that generally apply to working mothers.27
First, working mothers tend to earn less than men,28 but a large portion of their
income is comprised of earnings, as opposed to savings.29 Second, women
23. In this Essay, I presume that children are a public good, an investment in human capital,
not pure consumption. See Charles R. O’Kelley, Jr., The Parenting Tax Penalty: A Framework
for Income Tax Reform, 64 OR. L. REV. 375, 379 (1986).
24. Livingston, supra note 1, at 560.
25. Joseph T. Sneed, The Criteria of Federal Income Tax Policy, 17 STAN. L. REV. 567, 568
(1965); see also Robert P. Strauss, Administrative and Revenue Implications of Alternative
Federal Consumption Taxes for the State and Local Sector, 14 AM. J. TAX POL’Y 361, 363
(1997).
26. Sneed, supra note 25, at 569. Sometimes charges or excise taxes (and where the funds
go from the excise taxes) can be important. For example, Singapore imposes a monthly charge or
“tax” on the household employer of a foreign nanny or maid. Yeoh et al., supra note 12, at 117.
These funds do not go back to the payers or benefit the worker.
27. For an example of how to reframe these criteria, see Nancy E. Shurtz, A Critical View of
Traditional Tax Policy Theory: A Pragmatic Alternative, 31 VILL. L. REV. 1665, 1668 (1986)
(providing an example of how to reframe these criteria). For an economic perspective, see Faye
L. Woodman, Women and Children in the Economy: Reflections from the Income Tax System, 47
U. N.B. L. J. 311, 314 (1998) (discussing the Canadian tax system and the problematic trends
toward a hybrid system, towards flattening tax rates, and the emphasis on efficiency over equity).
28. Deborah J. Anderson et al., The Motherhood Wage Penalty Revisited: Experience,
Heterogeneity, Work Effort, and Work-Schedule Flexibility, 56 INDUS. & LAB. REL. REV. 273,
273 (2003).
29. U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-08-105, RETIREMENT SECURITY: WOMEN
FACE CHALLENGES IN ENSURING FINANCIAL SECURITY IN RETIREMENT (2007). See also
Anderson et al., supra note 28, at 273. Studies have shown that women with children incur a
“mommy tax” or penalty in the market. Michelle J. Budig & Paula England, The Wage Penalty
for Motherhood, 66 AM. SOC. REV. 204, 204 (2001); Martha S. Hill, The Wage Effects of Marital
Status and Children, 14 J. HUM. RESOURCES 579, 590 (1979).
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save less and spend more than the average man.30 They generally have less
wealth and retirement assets.31 Third, when the taxable unit is the married
couple and the rates are progressive, working mothers are encouraged to stay at
home.32 Fourth, working mothers tend to spend more time on household
chores and child care than other taxpayers, often with little leisure.33 Lastly,
working mothers tend to derive greater benefits from government services that
are financed with tax dollars.34
Tax subsidies in the form of deductions are more favorable to high income
earners.35 Low income earners, such as single moms, often take the standard
deduction36 or, if they are not taxpayers, do not receive any benefit from tax
deductions or nonrefundable credits.37 Refundable credits, such as the earned
income credit, can function the same as direct subsidies38 and are better than
nonrefundable credits for low income working mothers. However, direct
subsidies are best because they can be specifically targeted, adequate, and
30. MIMI ABRAMOVITZ & SANDRA MORGEN, TAXES ARE A WOMAN’S ISSUE: REFRAMING
THE DEBATE 19 (2006).
31. See Hannah L. Meils, Note, A Lesson from NAFTA: Can the FTAA Function as a Tool
for Improvement in the Lives of Working Women?, 78 IND. L.J. 877, 877 (2003). Working
women contribute 66% of the hours worked each day, but earn only 10% of the world income.
Id. See also Richard W. Johnson & Melissa M. Favreault, Economic Status in Later Life among
Women Who Raised Children Outside of Marriage, 59B J. GERONTOLOGY 315, 315 (2004),
available at http://psychsocgerentology.oxfordjornals.org/content/59/6/S315.abstract.
32. See EDWARD J. MCCAFFERY, TAXING WOMEN 3 (1997).
33. See Nancy C. Staudt, Taxing Housework, 84 GEO. L.J. 1571, 1579 (1996). Time use
studies in the United States show that employed mothers spend “seven fewer hours per week on
housework, six fewer hours sleeping, five fewer hours on personal care, and twelve fewer hours
on leisure activities.” Gornick & Meyers, supra note 7, at 318.
34. See ABRAMOVITZ & MORGEN, supra note 30, at 19.
35. For a nonfeminist argument that direct subsidies are best, see Stanley S. Surrey, Tax
Incentives as a Device for Implementing Government Policy: A Comparison with Direct
Government Expenditures, 83 HARV. L. REV. 705, 721 (1970). Surrey points out that “Tax
incentives are inequitable: They are worth more to the high income taxpayer, than the low income
taxpayer; They do not benefit those who are outside the tax system because their incomes are low,
they have losses, or they are exempt from tax.” Id. at 720 (caps and italics eliminated from
quote).
36. See GERALD PRANTE, TAX FOUND., FISCAL FACT NO. 95: MOST AMERICANS DON’T
ITEMIZE ON THEIR TAX RETURNS (2007), available at http://www.taxfoundation.org/publica
tions/show/22499.html.
37. Katherine D. Black et al., The Bias Against Single Parents in the Internal Revenue Code,
126 TAX NOTES 1397, 1397 (2010). The article points out that “13.6 million single parents” are
“rearing 21.2 million children,” representing “26 percent of the 81.6 million children living in
families” in America. Id.
38. See Heen, supra note 9, at 175.
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timely delivered.39 Thus, replacing tax benefits with direct subsidies would be
the single most important tax policy priority for working moms.
When the government takes over responsibility for child care, elder care,
education, or other responsibilities of the working mom, the working mother’s
welfare is greatly enhanced. Not only will her leisure increase, but her costs
for children will be reduced.40 It may be equally important for the system to
encourage her partner or family to be more supportive or grant allowances that
help pay more of her expenses, such as health and housing. A direct subsidy in
the form of a family allowance is used by most industrialized countries,41 and
makes sense as a tax policy matter.42
An efficient governmental system with small debt or even surpluses can be
important to working moms, particularly in recessions.43 In difficult times,
studies have shown that spending cuts can actually adversely impact
services—such as health, education, and child care.44 On the state level, fewer
school days means mothers bear the burden of child care.45 On the federal
level, Social Security benefit reductions have more of an impact on women
than men.46 At both levels, cuts in government employment can impact
women more because they have higher employment in the public sphere.47 On
the state level, balanced budget requirements often require the imposition of
39. Id. at 201. Heen points out that tax systems can provide “relative privacy, reduced
bureaucracy, and lack of stigma” but that the workability of refundable credits has the
disadvantages of “difficulty of implementing an advance payment mechanism for a population
that cannot easily wait until tax refund time” to get the benefit. Id. at 200–01. See also Jonathan
Barry Forman, Poverty: Greening the Tax and Transfer System to Create More Opportunities, in
AGENDA FOR A SUSTAINABLE AMERICA 187, 193 (John C. Dernbach ed., 2009) (stating that
“[t]ransfer programs reduce household income inequality much more than taxes” and citing the
Gini index reduction of 17% versus 4.6% with transfer programs).
40. O’Kelley, supra note 23, at 379.
41. Olsen, supra note 11, at 147.
42. See Anne L. Alstott, Tax Policy and Feminism: Competing Goals and Institutional
Choices, 96 COLUM. L. REV. 2001, 2005 (1996).
43. ABRAMOVITZ & MORGEN, supra note 30, at 19.
44. See id. at 81; NICHOLAS JOHNSON ET AL., CTR. BUDGET & POL’Y PRIORITIES, AN
UPDATE ON STATE BUDGET CUTS: AT LEAST 46 STATES HAVE IMPOSED CUTS THAT HURT
VULNERABLE RESIDENTS AND CAUSE JOB LOSS 1 (2011); ELAINE MAAG, URBAN INST.,
ANALYZING RECENT STATE TAX POLICY CHOICES AFFECTING LOW-INCOME WORKING
FAMILIES: THE RECESSION AND BEYOND 1 (Perspectives on Low-Income Working Families Ser.
No. 3, 2006).
45. ABRAMOVITZ & MORGEN, supra note 30, at 79.
46. Catherine Rampell, Measuring Dependence on Social Security, ECONOMIX, N.Y. TIMES
(June 7, 2010, 5:37 PM), available at http://economix.blogs.nytimes.com/2010/06/07/measuringdependence-on-social-security.
47. ABRAMOVITZ & MORGEN, supra note 30, at 28. Women in the United States out
number men 18% to 13% in public sector jobs. Id. In Sweden, women also make up a large
percentage of public employment. Bennhold, supra note 14.
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higher taxes, often regressive taxes like sales taxes. Tax increases can also
occur at the federal level, as well as increased federal debt, which can
mortgage our children’s future.48
Revenue for these direct subsidies must be raised and a tax system that
focuses on vertical equity rather than economic efficiency will serve most
working mother’s interests best.49 In the “land of autonomous, self-actualizing
and wealth-maximizing market participants,”50 working mothers’ concerns are
not taken into account. The mother’s responsibility for looking after her
children altruistically does not fit into this model.51 Consequently, a tax
system that taxes people according to their ability to pay with fair rates and a
comprehensive, yet fair, base is the second most important tax system feature
after providing direct subsidies.52 Progressive taxes are best because they not
only leave the lower income taxpayer with greater disposable income, but help
assure that taxes on the wealthy will finance needed social services.53 Working
mothers’ (and particularly single mothers’)54 greater family responsibilities
make them less competitive in the marketplace, resulting in lower wages and
wealth. A flat tax system with a comprehensive base would also work, if
liberal exemptions are provided for family responsibilities and direct social
subsidies are financed.55
The tax base is probably more important than the tax rates to working
mothers. Since women, particularly single women, rely on their earnings more
than men,56 any double taxation of wages, such as the federal income tax, the
payroll tax, and the state and local income and wage taxes will be detrimental
to her welfare.57 In addition, any favorable treatment of savings will not inure
to her benefit, since working mothers tend to consume more (due to work and
child-related expenses), spending a greater percentage of their income.58
Provisions in the income tax system that favor savings, such as those for
health, education, and retirement, should be modified or eliminated.59
48. ABRAMOVITZ & MORGEN, supra note 30, at 105–06.
49. Id. at 126; see also Meils, supra note 31, at 878 (criticizing international agreements for
not including provisions to protect the specific problems faced by working women).
50. Woodman, supra note 27, at 312.
51. Id.
52. ABRAMOVITZ & MORGEN, supra note 30, at 130.
53. Id. at 37, 125.
54. See Black et al., supra note 37, at 1397.
55. This is the Singapore model.
56. ABRAMOVITZ & MORGEN, supra note 30, at 19.
57. See id. at 86–87.
58. See id. at 61.
59. See id. at 57.
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Similarly, a broad-based income system that taxes capital gains and dividends
the same as earned income would be the best tax base.60
Subsidies for consumption that favor the wealthy, such as deductions for
vacation home mortgage interest, should be modified or eliminated.61
Conversely, job-related and child care expenses to produce earnings should be
subsidized.62 Lastly, taxes on consumption, such as sales and value added
taxes (VAT), should exempt basic necessities as well as those purchases, such
as prepared meals, that are more likely to be the expenditures of working
mothers.63
The taxable unit is another important feature of the taxing system for
working mothers.64 Family living arrangements affect economic well-being
and are important in determining a taxpayer’s ability to pay. Any tax system
that encourages women to be full-time homemakers or promotes the gendered
division of housework and child care is detrimental to working mothers’ best
interests.65 Giving up market work may also be detrimental when divorce or
separation rates are high,66 and joint filing may result in tax liability for the
innocent spouse.67 Individual taxation eliminates the high marginal tax rates
experienced by secondary earners in a progressive tax system.68 Individual
taxation eliminates the discrimination in the eligibility rules and phase-outs
when marital status is a factor. Under an individual unit system, income from
property should be apportioned according to ownership.69 Child subsidies
could be apportioned according to who cares for or provides financial support
for the children.70
60. See id. at 56–57.
61. See ABRAMOVITZ & MORGEN, supra note 30, at 55.
62. Id. at 57. Or a credit could be provided. All earners have extra expenses for
transportation, clothes, and meals. Parents have extra child care expenses.
63. Id. at 138–39.
64. Dulude, supra note 2, at 21, 60. At one time this factor was more important than the tax
base. Now, with most mothers working, the base seems to be more important.
65. See MCCAFFERY, supra note 32, at 138 (“The push toward single-earner families among
the Uppers makes Traditional families prominent among the rich and powerful and deprives
women of important positions at the top of the social hierarchy.”). See also Laura Ann Davis,
Note, A Feminist Justification for the Adoption of an Individual Filing System, 62 S. CAL. L. REV.
197, 198 (1988).
66. MCCAFFERY, supra note 32, at 2–3; see generally Stephen A. Zorn, Innocent Spouses,
Reasonable Women and Divorce: The Gap between Reality and the Internal Revenue Code, 3
MICH. J. GENDER & L. 421 (1996).
67. Gary L. Maydew, When is an Innocent Spouse Really Innocent?, TAXES: THE TAX
MAG., Jan. 1995, at 39.
68. Davis, supra note 65, at 218.
69. Id. at 198.
70. See generally Nancy E. Shurtz, Gender Equality and Tax Policy: The Theory of “Taxing
Men”, 6 S. CAL. REV. L. & WOMEN’S STUD. 485 (1997).
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Lastly, in circumstances where there are inadequate direct subsidies,
hybrid or consumption taxable bases, or the wrong taxing unit, specific tax
rules that address women’s concerns also become significant.71 How the tax
code addresses child care, elder care, housework, divorce, retirement, and
inheritance are all important. For example, how the tax system treats
children—as investments, consumption, or public goods—is a relevant tax
policy concern to working mothers.72 If child care and child rearing are
considered socially valuable activities, and children are treated as valuable
investments in human capital, then working mothers will not bear the major
responsibility for producing these valuable social goods.73 On the other hand,
when children are considered consumption, then their expenses are considered
the personal responsibility of the parent.74 When there is a failure on the
personal level to provide adequately for the children, the society may suffer the
consequences.75 Similarly, a tax system that subsidizes other care functions,
like those for the elderly or handicapped, can also provide more horizontal
equity among taxpayers as well as benefits to the state and society.76
This section begins by analyzing each country’s tax culture and policies
and identifying the criteria most valued by each system. It then goes on to
examine the tax features important for the welfare of working mothers. These
are divided into the following major categories: adequate revenue for direct
subsidies supporting women, vertical equity (including the tax base and tax
rates), and the tax unit.
A.
Sweden
The tax culture of Sweden focuses primarily on equity,77 both horizontal
and vertical.78 Horizontal redistribution is characterized as being accomplished
71. ABRAMOVITZ & MORGEN, supra note 30, at 51–54.
72. England & Folbre, supra note 10, at 196; see Folbre, supra note 10, at 86.
73. See Heen, supra note 9, at n.207.
74. Folbre, supra note 10, at 87.
75. Lynn A. Stout, Some Thoughts on Poverty and Failure in the Market for Children’s
Human Capital, 81 GEO. L.J. 1945, 1945 (1993).
76. See Folbre, supra note 10, at 87.
77. Olsen, supra note 11, at 145.
78. Joakim Palme, Income Distribution in Sweden, 5 JAPANESE J. SOC. SECURITY POL’Y 16,
16 (2006), available at http://ipss.go.jp/webj-ad/WEbJournal.files/SocialSecurity/2006/jun/
palme.pdf. See also SVEN R. LARSON, CTR. FOR FREEDOM & PROSPERITY, THE SWEDISH TAX
SYSTEM: KEY FEATURES AND LESSONS FOR POLICY MAKERS 4 (2006), available at
http://www.freedomandprosperity.org/Papers/sweden/sweden.shtml. The purpose of tax rates
and regulations in Sweden are to raise a given amount of revenue for the public sector, which
essentially redistributes the wealth. The difficulty in this systematic approach is that when “tax
rates are too high, the tax system distorts economic activity and hampers growth. As a result,
economic activity diminishes and the tax base shrinks. The tax system erodes its own
macroeconomic foundation.” Id.
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periodically over one’s life cycle through benefits, pensions, allowances, and
insurance.79 Vertical redistribution from the rich to the poor is accomplished
not only through welfare programs but also through progressive taxation.80
The Swedish tax system as a whole is more progressive than the tax system of
the United States or Singapore.81 Taxes in Sweden account for 47% of gross
domestic product (GDP), compared with 27% in the United States.82
The welfare state in Sweden is significant.83 “The public sector . . .
employs one in three workers, including half of all working women.”84
“Family benefits cost 3.3% of GDP, the highest in the world along with
Denmark and France.”85 A large percentage of the budget is allocated to social
welfare programs and, in contrast to the United States, a small percentage of
the overall budget is used to finance national defense.86
Overall, Sweden has been successful in reducing poverty and inequality
and providing broad subsidies to working moms.87 Compared internationally,
poverty rates in Sweden continue to be among the lowest.88 In addition to
progressive taxation and widespread welfare benefits, another factor
contributing to the low degree of inequality in Sweden is the relatively even
distribution of earnings. The Gini coefficient for 2005 was .230.89 According
to this measurement, which ranges between zero and one, the closer the value
is to zero, the more equal the distribution of wealth.90
79. Palme, supra note 78, at 16.
80. Id. at 16, 17.
81. Mohammad Tsani Annafari, Improving Tax-to-GDP Ratio: A Lesson From Sweden,
JAKARTA POST, Aug. 23, 2010, at 7. A country’s tax system is often defined as progressive if the
policies imposed are such that the wealthier taxpayer pays more tax in proportion to the
taxpayer’s earned income. See generally Tommy Ferrarini & Kenneth Nelson, Estimating PostTax Social Insurance Benefits: Validity Problems in Comparative Analyses of Net Income
Components from Household Income Data 10 (Swed. Inst. for Soc. Research, Working Paper
6/2002), available at http://people.su.se/~kennethn/Estimating%20Post-tax%20social%20insur
ance%20benefit.pdf. In contrast, a system will be defined as proportional, if tax liability is
equally distributed in relation to each taxpayer’s income.
82. Bennhold, supra note 14.
83. Olsen, supra note 11, at 145.
84. Bennhold, supra note 14.
85. Id.
86. MINISTRY OF FIN. SWED., THE SWEDISH ECONOMY IN FIGURES 7 (2010), available at
http://www.sweden.gov.se/sb/d/574/a/128092.
87. Palme, supra note 78, at 16.
88. Id. at 21.
89. Annafari, supra note 81 (“The Gini coefficient is a measure of inequality of distribution.
It is generally used as a measure of imbalance of income or wealth.”).
90. Id. The United States Gini coefficient is 0.45 as of 2007. Country Comparison:
Distribution of Family Income—Gini Index, CIA WORLD FACTBOOK, https://www.cia.gov/li
brary/publications/the-world-factbook/rankorder/2172rank.html (last visited Sept. 30, 2010).
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As for practicality, the Swedish tax system is relatively complex and
sophisticated.91 Sweden has taxes on income, capital, and consumption at both
the federal and local levels.92 Unlike the United States, the focus of the
Swedish taxation system is not on generating economic growth.93 Yet, “public
deficit and debt levels are a fraction of those in most developed economies
these days, testimony perhaps to fiscal management born of a banking crisis
and recession in the 1990s.”94
The politic of Sweden is one that fosters the welfare state system.95
Overall, Swedes seem to accept and support their government’s power to tax
and redistribute revenue.96 Although Swedes pay a very high level of taxes,
they do not appear to have a problem with either tax evasion or tax avoidance,
mainly because as one Swedish journalist put it, “most feel they are getting a
good return for their money.”97 With liberal family allowance, full-time
preschool guaranteed at a minimal fee, and quality elder care, “people feel they
are getting their money’s worth.”98
1.
Direct Subsidies
With respect to one of the criteria most important to women—adequate
revenue for programs supporting women—Sweden scores high.99 Sweden
generates more than adequate revenue from its tax system to finance its social
welfare system.100 The revenue raised through the progressive tax system is
pumped into the public sectors through direct subsidies to support the various
programs of the welfare state.101 By far the largest budgetary amount goes to
“social protection,” which includes child care, housing, and retirement
subsidies.102 This makes up nearly half of public expenditures.103 Subsidies
for education and health care are secondary in importance and together
91. LARSON, supra note 78, at 13.
92. Id. at 4.
93. Id. at 14.
94. Bennhold, supra note 14.
95. Olsen, supra note 11, at 159–60.
96. Paul Mulshine, Sweden Has Socialism but NJ Has Meatballs, NJ.COM BLOG (Apr. 24,
2008, 7:51 AM), http://blog.nj.com/njv_paul_mulshine/2008/04/sweden_has_socialism_but_nj_
ha.html.
97. Id.
98. Bennhold, supra note 14.
99. Olsen, supra note 11, at 145.
100. Id. at 147.
101. Palme, supra note 78, at 16.
102. REGERINGSKANSLIET: GOV’T OFFICES OF SWED., FACTS & FIGURES: SWEDISH
GOVERNMENT OFFICES YEARBOOK 2010, at 18 (2011), available at http://www.sweden.gov.
se/content/1/c6/17/17/06/39c20e86.pdf.
103. Id.
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comprise over 25% of the budget.104 A very small percentage of their budget
goes to defense.105 Sweden, like Singapore,106 has recently had surpluses in
their budget.107
2.
Vertical Equity
The Swedish Tax system as a whole has a very strong vertical equity
component. The rates are high and thus the people pay according to their
abilities. However, the tax base could be improved to be more beneficial to
working mothers.
a.
Tax Base
Sweden perhaps falls short of a perfect taxing system for working mothers
in the composition of its tax base. Most of Sweden’s revenue is collected
through labor taxes and consumption taxes, rather than through taxes on
property and capital.108 The country’s three major revenue generating groups
are labor taxes, goods and services taxes, and taxes on capital and business.109
Direct taxes on labor are paid by income earners and include local and state
taxes, as well as basic pension or social security contributions.110 Individual
income is taxed mainly by municipality of residence111 but may also be subject
to the national income tax if the income level exceeds the proscribed limit.112
In 2007 almost 60% of the tax revenue came from labor taxes, which also
includes indirect taxes such as those employers pay for social insurance.113
104. Id.
105. MINISTRY OF FIN. SWED., supra note 86, at 7.
106. See SING. GOV’T, BUDGET HIGHLIGHTS FINANCIAL YEAR 2008: CREATING A TOP
QUALITY ECONOMY; BUILDING A RESILIENT COMMUNITY 4 (2008), available at http://www.mof
.gov/sg/budget_2008/speech_toc/downloads/FY2008_Budget_Highlights.pdf.
107. See AULT ET AL., supra note 1, at 103 (“In recent years the budget has been balanced
and even with an increasing surplus (2001: 4.8%).”).
108. MATS SJÖSTRAND, SWEDISH TAX AGENCY, TAXES IN SWEDEN 2009: AN ENGLISH
SUMMARY OF TAX STATISTICAL YEARBOOK OF SWEDEN 8 (2009), available at http://skatever
ket.se/download/18.233f91f71260075abe8800021511/10410.pdf.
109. Id. at 9. Income taxes and social security taxes are imposed on income of the individual.
AULT ET AL., supra note 1, at 102. The tax on earned income from employment and business is a
progressive rate. Id. County and municipality income taxes are levied on income at rates decided
upon by the local government, but normally average around 31%. Id. at 104.
110. SJÖSTRAND, supra note 108, at 9.
111. Id. at 14. Swedish taxpayers pay taxes only on income derived within the country, not
on world-wide income, like the United States. INVEST IN SWED. AGENCY, FACT SHEET: TAXES
IN SWEDEN 1 (2008), available at http://investsweden.us/literature/Taxes_in_Sweden.pdf.
112. AULT ET AL., supra note 1, at 102.
113. SJÖSTRAND, supra note 108, at 9.
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Only 14% of the revenue came from taxes on capital and business.114 This
category also includes the tax on real estate.115
Sweden has a form of social security tax.116 In 2007, basic pension
contributions were charged at 7%.117 Social security contributions are paid by
the employer, on up to 33% of earned income for employers and 31% of
earned income for employees.118 About 60% of these contributions are
considered taxes because they do not result in any social benefit.119
As a result of these taxing systems, working women’s salaries are
sometimes taxed three times, just like in the United States. Unlike the United
States system, however, the Swedish income tax base is not riddled with
deductions for the wealthy, or subsidies for savings.
A fairly significant portion—28% of the tax revenue—comes from taxes
on goods and services, including the value added tax (VAT).120 Sweden’s
VAT on goods and services has three levels:121 25% for most goods and
services (standard base), 12% for foods and hotel stays, and 6% for printed
matter, cultural events, and transport of private persons.122 Again, if working
women are more likely to spend more money on prepared meals, clothing, and
other necessities for the family, such a system will decrease their welfare.
b.
Tax Rates
Sweden’s federal taxes are highly progressive, ranging up to 57% on high
income earners.123 The income tax rates levied on earned income ranges from
around 13% to as high as 38%.124 Sweden has a zero-bracket amount for
personal income tax, which effectuates a threshold level of earned income for
the income tax to be imposed.125 No income tax is levied on the first 16,600
SEK (approximately $2,278) of earned annual income.126
114. Id.
115. Id. at 9, 13.
116. Id. at 11.
117. Id.
118. AULT ET AL., supra note 1, at 103.
119. Id. at 102–03, 103 n.14.
120. SJÖSTRAND, supra note 108, at 9, 16. In 2007, the total revenues amounted to 1484
billion SEK of which 479 billion was attributable to income taxes, 473 billion to social security
contributions, and 288 billion to the VAT. Id. at 9, 11, 16.
121. SWEDISH TAX AGENCY, THE VAT BROCHURE, SKV 552B EDITION 10 (2010), available
at http://www.skatteverket.se/download/18.6efe6285127ab4f1d2580008468/552B10.pdf.
122. SJÖSTRAND, supra note 108, at 16.
123. Id. at 25. Sweden and Denmark are competitors “for the dubious honor of the world’s
highest tax burden.” LARSON, supra note 78, at 1.
124. SJÖSTRAND, supra note 108, at 25.
125. LARSON, supra note 78, at 5.
126. Id.
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A 20% state income tax is imposed on individuals who earn more than
316,700 SEK per month and 25% for those earning more than 476,700 SEK
per month.127 In 2007 the average local income taxes levied by municipalities
and county councils was 31.55% of every 100 SEK earned.128 The basic
allowance for these local taxes is usually 11,900 SEK, but could increase to a
maximum of 31,100 SEK.129 In 2007, the median income for full-time
working males was 321,200 SEK; for full-time females the median income
was 268,500 SEK.130
Corporate tax rates for limited liability companies are levied at a flat rate
of 28% on profits and other taxable income.131 Sole proprietors and trading
partnerships are taxed as the owner’s income from employment.132 Like the
United States, corporations are subject to a system of double taxation.133
3.
Tax Unit
Perhaps the most significant tax change in the Swedish taxation system
was the shift to the individual unit from the family-based system which
aggregated the income of the household couple.134 Now, each individual is
taxed on what he or she earns or generates.135 Nevertheless, the married
couple is treated as one economic unit for purposes of unearned income.136
Therefore, the incentive is not to share the underlying property that generates
the unearned income.
The taxable unit was changed as a means of encouraging secondary
workers (primarily women) to enter the workforce.137 The Swedish system, in
contrast to the American system,138 ensures that the marginal tax rate on the
secondary worker is not affected by the income level of the other partner.139
This encourages women to work outside the home and return to work after
exercising the parental leave allowances.140
127. SJÖSTRAND, supra note 108, at 11.
128. Id. at 6, 10.
129. Id. at 10.
130. Id.
131. Id. at 47.
132. SJÖSTRAND, supra note 108, at 47.
133. AULT ET AL., supra note 1, at 102.
134. Id. at 262.
135. Palme, supra note 78, at 18.
136. Dulude, supra note 2, at 81.
137. AULT ET AL., supra note 1, at 262–63.
138. See I.R.C. § 1 (2006) (showing rates for aggregated income for married couples filing
jointly versus those filing as individuals).
139. AULT ET AL., supra note 1, at 263.
140. Palme, supra note 78, at 18.
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Instead of dependency exemptions or other deductions for families,
Sweden, like most European countries, has a “family allowance” that arguably
covers the involuntary expenditures of the minimal necessities of everyday
life.141 In 2008, Sweden introduced a gender equality bonus designed to
provide an incentive for mothers and fathers to share parental leave equally.142
With some of the same goals in mind, Sweden allows a deduction for some
household-related services, in order to encourage women to increase their
working hours.143
At one point in the history of the Swedish tax system, a debate arose as to
the desirability of allowing a deduction for the expenses of domestic
workers.144 In the 1990s when the state cut the elder care supports, a number
of higher income citizens, including several government officials, hired underthe-table domestic workers.145 In 1993, a tax subsidy for these expenses was
proposed, debated, and defeated.146 The proponents argued that these expenses
were just like any other legitimate business expense.147 The opponents argued
that these were personal expenses, only benefiting the wealthy, and were
inconsistent with the Swedish culture of equality.148
The Swedish system allows deductions for all workers who incur work
related expenditures. For example, all workers get a basic allowance of
between SEK 12,600 (about $1,625) and SEK 33,000 (about $4,275).149 The
purpose of this provision was to encourage those on welfare (particularly
single moms) to enter the market and get jobs.150 Unlike the United States’
141. Olsen, supra note 11, at 146–47. The general child allowance, paid out to the child’s
mother, covers all resident children until they reach 16 years of age (or 20 if a student, or 23 if
attending a special school for the intellectually disadvantaged). The allowance is about 1050
SEK a month (around $150). Sweden, CLEARINGHOUSE ON INT’L DEVS. IN CHILD, YOUTH, &
FAMILY POLICIES AT COLUMBIA UNIV., http://childpolicyintl.org/countries/sweden.html#family
allowances (last visited July 31, 2011).
142. MINISTRY OF INTEGRATION & GENDER EQUAL., FACT SHEET: THE SWEDISH
GOVERNMENT’S GENDER EQUALITY POLICY 3 (2009), available at http://www.sweden.gov.se/sb/
d/574/a/130715.
143. Id. at 4.
144. John R. Bowman & Alyson M. Cole, Do Working Mothers Oppress Other Women? The
Swedish “Maid Debate” and the Welfare State Politics of Gender Equality, 35 SIGNS: J. OF
WOMEN IN CULTURE & SOC. 157, 158 (2009).
145. See id.
146. Id. at 161.
147. Id.
148. Id. at 163.
149. Sweden, in LEX MUNDI, TAX DESK BOOK 408, 408 (2010), available at http://www.lex
mundi.com/Document.asp?DocID=2316&SnID=2.
150. See Rolf Aaberge & Lennart Flood, Evaluation of an In-Work Tax Credit Reform in
Sweden: Effects on Labor Supply and Welfare Participation of Single Mothers 2–3 (IZA
Discussion Paper, No. 3736, 2008), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_
id=1278937; Lennart Flood et al., From Welfare to Work: Evaluating a Proposed Tax and Benefit
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earned income credit, however, there is no phase-out for high earners or any
refund feature. Interestingly, the Swedish taxpayer is allowed a deduction for
commuting, if the expenses exceed SEK 7,000 (about $900) per year.151
Lastly, an important feature of the Swedish taxing system is the benefits
the system provides to single parents. They qualify for additional family
allowances as well as special tax breaks.152
B.
Singapore
While Sweden’s taxing system is known for its equity, Singapore’s taxing
system is known for its simplicity and efficiency. Paying taxes in Singapore is
so simple that some taxpayers are not required to file returns.153 The Inland
Revenue Authority of Singapore (IRAS), which receives employment
information from employers, sends out a notice informing the employee of her
tax liability.154 If the taxpayers agree with the notice, they do nothing.155
However, if they disagree or their circumstances change, they simply send in
the correction.156 The IRAS then gives an “assessment” and recalculates the
tax.157 The taxpayer can pay online, by phone, or with a check.158 A survey of
the two nations found that 96% of Singapore’s taxpayers prepared their own
returns, but only 37% of United States federal taxpayers did the same.159
Singapore has no withholding of taxes for residents.160 However, many
employers pay their employees a half-month bonus in June and a full-month
bonus in December.161 Such bonuses are part of the employment package and
act as a kind of tax withholding, which many employees use to pay their
Reform Targeted at Single Mothers in Sweden 1 (IZA Discussion Paper, No. 891, 2003),
available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=459562.
151. AULT ET AL., supra note 1, at 208.
152. Dowd, supra note 2, at 323.
153. Filing Tax: Do I Have to File Tax, INLAND REVENUE AUTH. OF SING., http://www.iras.
gov.sg/irasHome/page.aspx?id=1448 (last visited June 10, 2011).
154. Id.
155. Types of Income Tax Bill (Notice of Assessment-NOA), INLAND REVENUE AUTH. OF
SING., http://www.iras.gov.sg/irasHome/page01.aspx?id=124 (last visited June 10, 2011).
156. After Filing Tax: Change Filing Details, INLAND REVENUE AUTH. OF SING.,
http://www.iras.gov.sg/irasHome/page04.aspx?id=120 (last visited June 10, 2011).
157. After Getting the Tax Bill: What if the Tax Amount is Not Correct, INLAND REVENUE
AUTH. OF SING., http://www.iras.gov.sg/irasHome/page04_ektid126.aspx (last visited June 10,
2011).
158. After Getting Tax Bill: How to Pay, INLAND REVENUE AUTH. OF SING., http://www.iras.
gov.sg/irasHome/page03a.aspx?id=128 (last visited June 10, 2011).
159. Donna D. Bobek et al., The Social Norms of Tax Compliance: Evidence from Australia,
Singapore, and the United States, 74 J. BUS. ETHICS 49, 54 (2007).
160. What is a Withholding Tax?, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/
irasHome/page04.aspx?id=3220 (last visited June 10, 2011).
161. See CHWEE HUAT TAN, A PRIMER: PERSONAL FINANCE IN SINGAPORE 43 (2d ed. 2001).
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taxes.162 If the employer does not make such a bonus payment, employees are
responsible for saving funds to pay their taxes.
Because of liberal exemptions, large numbers of Singaporeans do not even
pay taxes.163 In 2005, a little over 40% of the labor force were considered
taxpayers.164 Thus, the incentives that do exist in the income tax system fall on
the higher income taxpayers.165 Many of these rebates and relief measures are
available only to women.166
The tax system of Singapore is noteworthy for its mandated responsibility
through forced savings.167 The Central Provident Fund (CPF) is a trust fund
generated by workers.168 It is similar to the U.S. Social Security system except
that, it is an actual existing fund, and in addition to retirement, it can be used as
a safety net for education or other purposes, such as the purchase of a home or
in case of unemployment.169
Like Swedish citizens, Singaporeans perceive the system as transparent
without hidden loopholes that favor the wealthy.170 Thus, there is virtually no
tax fraud in Singapore.171 With the traditional culture of deference to
authorities and the additional desire to act for the good of all, evasion of taxes,
or even avoidance, could be seen as a negative trait.172 In fact, a study on
taxpaying mentality in Singapore, Australia, and the United States concluded
“[T]he first and most influential factor was taxpayers’ own personal moral
beliefs, along with the beliefs of those close to them (e.g., friends and
important others).”173
162. See Email Interview with Sien Lee, J.D., University of Oregon Law School, 2009;
Singaporean mother of two (May 28, 2009) (on file with author).
163. Youyenn Teo, Gender Disarmed: How Gendered Policies Produce Gender-Neutral
Politics in Singapore, 34 SIGNS: J. WOMEN CULTURE & SOC’Y 533, 542 (2009).
164. Id. at 543 n.15.
165. Id. at 542. Singapore had a controversial pro-natal policy that promoted child birth in
high income populations. Id.
166. See id. at 543.
167. Callick, supra note 22.
168. Michael A. Lev, Singapore’s Retirement System Worth Studying, SEATTLE TIMES (Mar.
20, 2005), http://seattletimes.nwsource.com/html/businesstechnology/2002213550_singapore
20.html.
169. Id.
170. With Singapore’s economic advancement and younger generations who have not been
exposed to the tumultuous early years of independence, there is no certainty that the same
attitudes towards paying taxes will be sustained.
171. Choon Yin Sam, Curbing Tax Evasion in Singapore: The Role of Governance and
Corporate Governance Standards in the Tax Agency, 11 INT’L PUB. MGMT. REV. 23, 24 (2010).
172. Bobek et al., supra note 159, at 57.
173. Id. at 49.
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Direct Subsidies
In 2007 Singapore generated more than adequate revenue to effectively run
its country and finance its limited welfare (housing, health, and education)
system.174 Singapore is so efficient in its collection process that in 2007 it ran
primarily surpluses.175 The scale of welfare support in Singapore is minimal
compared to that of Sweden.176 This is due in large part to Singapore’s focus
on “personal responsibility.”177 The charges the government makes for
nannies are not placed back into the support system for working moms or their
nannies but rather are used for general financing of the government.178
The country’s major revenue generating groups are the income tax and the
value added tax. In 2009, almost 39.6% of its revenues came from the income
tax and 17.5% from the VAT.179 Most of the revenue raised, nearly 46%, is
used for “Social Development,” which includes housing, education, and
health.180 In 2009, almost 35% of Singapore’s budget went into “Security and
External Relations,” of which 77% was allocated to the Ministry of Defense.181
Although this amount is quite large when compared to Sweden, Singapore is
known for its surveillance and autocracy.
2.
Vertical Equity
The Singapore tax system is vertical equitable in that many low-income
taxpayers are exempt from tax. The rates are not progressive, but the base is
comprehensive. It is very working-mother friendly for the upper income
groups since many exemptions are provided in the tax system for family
responsibilities.
174. SING GOV’T, supra note 106, at 4.
175. Id.
176. See Youyenn Teo, Inequality for the Greater Good: Gendered State Rule in Singapore,
39 CRIT. ASIAN STUD. 423, 426 (2007) (“The Singapore state is situated in such a demographic
context, and, in contrast to some European states, it tries to appear staunchly ‘anti-welfare’ as it
presents itself.”).
177. Callick, supra note 22.
178. See Yeoh & Annabnurai, supra note 12, at 550. Employers post a security bond to
ensure that the employer has sufficient funds to repatriate the worker at the end of the contract.
See Yeoh et al., supra note 12, at 118 (stating levy is to regulate not as a trust fund). Again, it
appears as though, except for the permit process, the maids are the “personal responsibility” of
the family.
179. SINGAPORE GOV’T, REVIEW OF FINANCIAL YEAR 2010, available at http://www.singa
porebudget.gov.sg/budget_2011/revenue_expenditure/toc.html.
180. An Overview of the Singapore Tax System, INLAND REVENUE AUTH. OF SING.,
http://www.iras.gov.sg/irasHome/page03a.aspx?id=5676 (last visited June 10, 2011).
181. Expenditure Overview, SING. BUDGET, http://www.mof.gov.sb/budget_2009/expenditure
_overview/social_dev.html (last visited June 10, 2011).
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Tax Base
Singapore raises revenue through an income tax, a VAT, and other
charges. Most of this revenue is raised through the income tax.182
Singaporeans pay tax on income earned in Singapore or derived from
Singapore-based business.183 The income base is fairly comprehensive.184
Besides deductions for business expenses and rental expenses, the income tax
has fifteen clearly defined deductions and two tax rebates or allowances.185 Of
the fifteen deductions, the Earned Income Relief186 is for everyone who
received earned income.187 This is similar to the Swedish system and unlike
the United States earned income credit. In addition to the eight provisions
discussed in the prior section, there is a tax write-off for charitable donations
and a special allowance or rebate to “cushion the effects of the economic
downturn on individuals.”188 Lastly, there are several retirement fund (CPF)
initiatives to encourage savings.189
It is important to note that Singapore also has “charges” or “fees” that help
with raising revenue. Large amounts of revenue are raised through charges for
maid or nanny services.190 It is also important to note that, unlike many excise
taxes in the United States, none of these funds go back into the system to help
with the immigration or support of these servants.191
b.
Tax Rates
In contrast to Sweden, the income tax rates for Singaporeans are quite low.
Those whose taxable income is $20,000 or less pay no income tax at all.192
The rate for the next $10,000 is 3.5%.193 The rate is progressive and caps at
20% for people who earn over $320,000.194 Consequently, about 40% of
182. S. Sharma, Tax Headaches & How to Treat Them, SMA NEWS, May 2002, at 8, 9.
183. PRICEWATERHOUSECOOPERS, TAX FACTS & FIGURES: 2009 SINGAPORE 1, available at
http://www.pwc.com/sg/en/tax-facts-and-figures.
184. Id.
185. Individuals (For Locals), INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/iras
Home/page01.aspx?id=110 (last visited June 10, 2011).
186. Earned Income Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/iras
Home/page01.aspx?id=200 (last visited June 10, 2011). This is to recognize earners and their job
related expenses. Id.
187. PRICEWATERHOUSECOOPERS, supra note 183, at 4.
188. Individuals (For Locals), supra note 185.
189. Lev, supra note 168.
190. Yeoh et al., supra note 12, at 121 (noting the “total sum collected each year is by no
means small, amounting to an annual figure in the region of $30 million”).
191. See supra note 178 and accompanying text.
192. Income Tax Rates, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/irasHome/
page04.aspx?id=1190 (last visited Sept. 19, 2010).
193. Id.
194. Id.
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residents pay no taxes.195 Because of these low rates, it is fairly easy for
Singaporeans to pay their taxes. In addition, low rates of income tax
encourage compliance and cooperation.
Furthermore, the Singapore
government is very fiscally frugal, often resulting in yearly budget
surpluses.196 Low taxes also encourage economic growth because there is
more income for the taxpayer to save and invest. Clearly, one of Singapore’s
tax policies has been to grow its economy through its simple and low taxing
scheme.
3.
Tax Unit
Like Sweden, the taxable unit in Singapore is the individual.197 Unlike
Sweden, however, the Singapore income tax provides numerous deductions
and credits for family responsibility. These tax incentives “mark the
expectation that women play dual roles as workers and mothers”198 and are a
“central strategy for encouraging fertility” and reinforcing the woman’s
supportive role within the family.199 Seven of the income tax deductions relate
to having or caring for children, grandparents, or handicapped siblings: the
Qualifying Handicapped Child Relief, 200 the Working Mother’s Child
Relief,201 the Grandparent Caregiver Relief,202 the Spouse Relief,203 the
Parent/Handicapped Parent Relief,204 the Handicapped Brother/Sister Relief,
205
and the Foreign Maid Levy Relief.206 In addition there is a Parenthood Tax
195. See Teo, supra note 163, at 543 n.15.
196. See supra note 174 and accompanying text.
197. See Inland Revenue Authority of Singapore, http://www.iras.gov.sg/irasHome/page04.
aspx?id=1190.
198. Teo, supra note 176, at 429.
199. Teo, supra note 163, at 542.
200. Qualifying Child Relief/Handicapped Child Relief, INLAND REVENUE AUTH. OF SING.,
http://www.iras.gov.sg/irasHome/page01.aspx?id=214 (last visited June 10, 2011). This is to
recognize the support for dependent/handicapped children. PRICEWATERHOUSECOOPERS, supra
note 183, at 6.
201. Working Mother’s Child Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.
gov.sg/irasHome/page01.aspx?id=220 (last visited June 10, 2011). This is to encourage married
women to remain in the workforce. PRICEWATERHOUSECOOPERS, supra note 183, at 6.
202. Grandparent Caregiver Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.
gov.sg/irasHome/page01.aspx?id=204 (last visited June 10, 2011). This relief is provided to
grandparents who care for their grandchildren. PRICEWATERHOUSECOOPERS, supra note 183, at
6.
203. Spouse Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/irasHome/
page01.aspx?id=218 (last visited June 10, 2011). This is also entitled the “Spouse/Handicapped
Spouse Relief” and is intended to provide relief for supporting a non-earner spouse. Id.
204. Parent/Handicapped Parent Relief, INLAND REVENUE AUTH. OF SING., http://www.ir
as.gov.sg/irasHome/page01.aspx?id=212 (last visited June 10, 2011).
205. Handicapped Brother/Sister Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.
gov.sg/irasHome/page01.aspx?id=206 (last visited June 10, 2011).
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Rebate,207 similar to the Swedish family allowance, but only available to
married couples.208 Again, the purpose here is to encourage couples to have
more children.209
Three of these tax deduction provisions are available only to working
mothers: the Working Mother’s Child Relief,210 the Grandparent Caregiver
Relief,211 and the Foreign Maid Levy Relief.212 Resident working mothers that
were married, divorced, or widowed in the previous year are eligible for a
Working Mother’s Child Relief.213 This specific deduction aims to encourage
mothers to remain in the workforce after giving birth.214 The Grandparent
Caregiver Relief, like most of the other deductions, is for taking care of one’s
parents, grandparents, handicapped siblings or a disabled or divorced spouse.
The tax system also provides tax relief to married working mothers who
employ foreign domestic workers: The Foreign Maid Levy Relief.215 This
relief is equal to twice the tax paid to the immigrant domestic worker.216 In
essence, this results in all taxpayers subsidizing this particular family
arrangement.217
206. Foreign Maid Levy Relief, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/
irasHome/page01.aspx?id=202 (last visited June 10, 2011). This subsidy is to encourage married
women to “remain in the work force” and also encourage “procreation.” Id. Single women and
males are not eligible for this subsidy. See id.
207. Parenthood Tax Rebate, INLAND REVENUE AUTH. OF SING., http://www.iras.gov.sg/iras
Home/page01.aspx?id=1528 (last visited June 10, 2011). This subsidy encourages children and
provides financial support to parents. Id.
208. Id.
209. Id.
210. PRICEWATERHOUSECOOPERS, supra note 183, at 6.
211. Id.
212. Teo, supra note 176, at 429. See also supra notes 175–77.
213. Working Mother’s Child Relief, supra note 201; see also PRICEWATERHOUSECOOPERS,
supra note 183, at 6.
214. Teo, supra note 176, at 429. In terms of coherence, Singapore’s system clearly signals
that the goal of taxation is to raise revenue, and gives incentives for intra-familial responsibilities
and increasing the birth rate. The government has tried for two decades to increase the birthrate,
but to no avail. Promoting population growth is considered important enough to involve the tax
code, because Singapore has one of the lowest birth rates in the world. Population in Brief 2010,
http://www.singstat.gov.sg/stats/themes/people/popinbrief2010.pdf.
215. Foreign Maid Levy Relief, supra note 206.
216. Id; see also Yeoh et al., supra note 12, at 123.
217. See Teo, supra note 163, at 544 (“[I]n offering tax relief to married working mothers
who employ foreign domestic workers (and not to most other categories of Singaporeans) the
state compels all taxpayers to subsidize a particular familial arrangement built upon lopsided
gendered divisions of labor.”).
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C. United States
While the Swedish tax system is known for its equity and the Singapore
tax system is known for its efficiency, the U.S. tax system is known for its
complexity.218 The United States has a federal system comprised of income,
Social Security, excise, estate, gift, and generation-skipping taxes.219 In
addition, each state in the United States has a property tax, plus either an
income tax or a consumption tax, or both.220 The U.S. system has been
criticized as yielding excessive tax breaks for particular constituencies and, as
a result, being “riddled with loopholes.”221 The federal income tax code is full
of subsidies for education,222 housing,223 charities,224 and the environment.225
Despite its complexities, the overall effectiveness, including administration
and implementation, of the system is reflected by the high rate of compliance
by taxpayers.226 However, tax avoidance is very common and accepted.227
218. JOEL SLEMROD & JON BAKIJA, TAXING OURSELVES: A CITIZEN’S GUIDE TO THE
DEBATE OVER TAXES 3 (4th ed. 2008).
219. Id. at 14. As of this writing (Jan. 13, 2010) the federal estate tax has been repealed.
220. Sheets: Taxes: State and Local Taxes, U.S. DEP’T OF TREASURY, http://www.ustreas.
gov/education/fact-sheets/taxes/state-local.shtml (last visited Sept. 2, 2010). As a response to
these complexity issues, many argue that U.S. tax policy needs to focus on increasing practicality
by making the system easier to understand, administer, and implement, with the overall goal
being to create a cost-effective system that allows taxes to be easily collected. SLEMROD &
BAKIJA, supra note 218, at 3–4.
221. See STEINMO, supra note 1. Although many Americans seem to favor the idea of flat
taxes, they tolerate the present system. See Livingston, supra note 1, at 563.
222. See generally NANCY SHURTZ, EDUCATION PLANNING: TAXES, TRUSTS, AND
TECHNIQUES (2009); Charlotte Crane, Scholarships and the Federal Income Tax Base, 28 HARV.
J. ON LEGIS. 63 (1991); John K. McNulty, Tax Policy and Tuition Credit Legislation: Federal
Income Tax Allowances for Personal Costs of Higher Education, 61 CAL. L. REV. 1 (1973); Sean
M. Stegmaier, Tax Incentives for Higher Education in the Internal Revenue Code: Education Tax
Expenditure Reform and the Inclusion of Refundable Tax Credits, 37 SW. U. L. REV. 135 (2008).
223. See generally William G. Gale et al., Encouraging Homeownership Through the Tax
Code, 115 TAX NOTES 1171 (2007); Mark Andrew Snider, The Suburban Advantage: Are the Tax
Benefits of Homeownership Defensible?, 32 N. KY. L. REV. 157 (2005).
224. See generally Boris I. Bittker, Charitable Contributions: Tax Deductions or Matching
Grants?, 28 TAX L. REV. 37 (1972); Paul R. McDaniel, Federal Matching Grants for Charitable
Contributions: A Substitute for the Income Tax Deduction, 27 TAX L. REV. 377 (1972); C.
Eugene Steuerle & Martin A. Sullivan, Toward More Simple and Effective Giving: Reforming the
Tax Rules for Charitable Contributions and Charitable Organizations, 12 AM. J. TAX POL’Y 399
(1995).
225. See Mona L. Hymel, The Population Crisis: The Stork, The Plow, and the IRS, 77 N.C.
L. REV. 13 (1998); Roberta Mann, Waiting to Exhale?: Global Warming and Tax Policy, 51 AM.
U. L. REV. 1135 (2002).
226. Livingston, supra note 1, at 561. Compared to Sweden and Singapore, however, the
compliance is much lower. In 2001, the tax compliance rate was estimated at about 84%.
Enforcement of Tax Laws, U.S. GOV’T ACCOUNTABILITY OFFICE, http://www.gao.gov/highrisk/
risks/tax-law/tax_laws.php (last visited Jan. 1, 2010).
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The United States is less focused on vertical equity than Sweden.228
Nevertheless, the federal income tax is progressive, with marginal rates up to
35%.229 Other taxes, most notably the Social Security tax and capital gains
taxes, as well as virtually all state tax systems, are regressive.230 As one
website notes, the Gini coefficient (a measure of inequality of income
distribution) for the United States is 0.466.231 As mentioned earlier, this
coefficient ranges between zero and one, and the closer the value is to zero, the
more equal the distribution of wealth.232 The statistics show that the U.S. Gini
coefficient has been increasing slowly over the years.233
Some scholars believe that there is “long-term erosion in the support for
progressivity” in the United States.234 Progressive taxation reflects a nation’s
commitment that costs of government should be based on ability to pay.235
One feminist scholar, Majorie Kornhauser, views the progressive tax as
obligatory toward the good of society as “a means by which individuals fulfill
their responsibilities to others.”236 Unfortunately, regressive taxes hit working
mothers particularly hard, resulting in less disposable income for the
necessities of child care, health care, college, and other expenditures.237
Livingston argues that the weakened support for progressivity arises from three
processes: the conservative direction of politics in the United States, poverty
among women and minorities, and the effect of the globalization process,
which suggests that a country with progressive rates will lose business to other
countries.238
227. SLEMROD & BAKIJA, supra note 218, at 145.
228. STEINMO, supra note 1, at 37.
229. These rates are due to expire and increase to 39.6% in 2011. See Eric Fox, How Will the
Expiring Bush Tax Cuts Affect You?, FORBES.COM (July 22, 2010, 2:30 PM), available at
http://www.forbes.com/2010/07/22/expiring-bush-cuts-affect-personal-finance-taxes.html.
230. See Brian Roach, Progressive and Regressive Taxation in the United States: Who’s
Really Paying (and Not Paying) Their Fair Share? 8 (Global Dev. & Env’t Inst., Working Paper
No. 03-10, 2003).
231. Carter Romansky, Dissect-O-Stat: The Gini Coefficient, 90WAYS.COM, http://90
ways.com/essayarchive/essay69.php (last visited Sept. 20, 2010).
232. See CIA WORLD FACTBOOK, supra note 19.
233. Eric M. Zolt, Inequality, Collective Action, and Taxing and Spending Patterns of State
and Local Governments, 62 TAX L. REV. 445, 490 (2009).
234. Livingston, supra note 1, at 559. There is continued discussion and literaure regarding
proposals for redistribution of wealth, but most of the concern focuses on “a reshuffling of
resources for the sake of some vague principle of fairness.” Shurtz, supra note 70, at 528–29.
235. Ferrarini & Nelson, supra note 81, at 10.
236. Marjorie E. Kornhauser, The Rhetoric of the Anti-Progressive Income Tax Movement: A
Typical Male Reaction, 86 MICH. L. REV. 465, 518 (1987).
237. Diana Furchtgott-Roth, Higher Taxes Hit Working Wives, REUTERS BLOG (Mar. 4, 2009,
9:12 PM), http://blogs.reuters.com/great-debate/2009/03/04/higher-taxes-hit-working-wives.
238. Livingston, supra note 1, at 559.
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The conservative direction of the country has resulted in tax policy being
focused on economic growth rather than equity.239 Since the United States is a
very capitalist society, it prides itself on rewarding perseverance and
entrepreneurship as a means of success and wealth. Americans strive to
improve their lives through work, home ownership (and even vacation home
ownership), and at death, they want to leave their children with substantial
inheritances.240 Overall, Americans expect consistent growth and they are firm
believers in the market-based economy.
Political philosophy thus plays a significant role in U.S. tax policy.241 The
United States has largely adopted a model of “personal responsibility.”242 The
individual is seen as capable of providing for himself or herself and his or her
family by working and saving.243 Thus, they are responsible for child rearing,
preschool, college costs, and (historically) health care.244 Only in unusual
circumstances, such as welfare, unemployment, disability, or retirement (and in
the future, health care) will the state provide support.245
Americans’ opinion on the tax code varies. A Kaiser Family Foundation
survey indicated that a slim majority (51%) believe the federal tax system is
fair—up a few percentage points from the past few years.246 An ABC
News/Washington Post Poll indicated that taxpayers want to keep the Bush tax
cuts but are very concerned with the deficit and spending. 247 Finally, a Gallup
survey conducted in April of 2010 showed that Americans are split on whether
their taxes are too burdensome.248 Gallup has been asking Americans about
239. ABRAMOVITZ & MORGEN, supra note 30, at 70–73, 83–84 (stating that the trend for les
progressive taxation accelerated with the election of President Ronald Reagan and were made
worse by the Bush tax cuts). See also id. at 61 (describing the Bush repeal of the estate tax,
elimination of the phase-out tax provisions under Section 68 and Section 152 of the Code).
240. The United States was born from humble roots and yet became a global superpower in
less than 200 years as a result of the nation’s achievements.
241. Livingston, supra note 1, at 562. These philosophical views differ between
individualism and egalitarianism. See id. Egalitarians see the tax system as part of one’s civic
duty and view fairness as a major argument for tax compliance. Id.
242. See id. (discussing the importance of individualism to Americans).
243. See id.
244. See discussion infra Part I.C.2.a.
245. See infra notes 300–04 and accompanying text (discussing the American Social Security
system).
246. NPR/KAISER/KENNEDY SCH., POLL: AMERICANS’ VIEWS ON TAXES 1 (2003), available
at http://www.kff.org/kaiserpolls/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=14
296.
247. Washington Post–ABC News Poll, WASHINGTONPOST.COM, http://washingtonpost.com/
wp-srv/politics/polls/postpoll_060810.html (last visited July 31, 2011).
248. Frank Newport, Americans Split on Whether Their Income Taxes are Too High, GALLUP
(Apr. 14, 2010), http://www.gallup.com/poll/127346/americans-split-whether-income-taxeshigh.aspx.
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their taxes since 1956 and in almost every year, Americans have considered
their taxes too high.249
The legislative tax-writing process in the United States is complex and
involves a mixture of partisanship and nonpartisanship, consensus, and
institutional input from a variety of committees and counsels, such as the
congressional Joint Committee on Taxation and the Department of the
Treasury Office of Tax Legislative Counsel.250 The Internal Revenue Service
is a bureau of the Department of the Treasury and is one of the most efficient
tax administrators in the world.251 The process of tax-writing involves
balancing the division of power between the various congressional committees,
other actors (including lawyers), and state and federal governments.252 As
might be expected, “change tends to be slow and incremental and it is difficult
to ascribe any clear ideological direction to it.”253
1.
Direct Subsidies
The U.S. federal tax system as a whole does not rate as well on the tests of
fiscal adequacy as Sweden and Singapore. While both Singapore and Sweden
have had recent budget surpluses, the current national debt of the United States
is almost nine trillion dollars.254 Such debt is detrimental to the most
vulnerable—single moms and children—because debt often results in reduced
social welfare spending and/or increased regressive taxation.255 Similarly, the
requirement that states have to balance their budgets has caused hardship to
working mothers and children.256
The federal budget outlays consist of 37% for Social Security, Medicare,
and other retirement benefits; 24% for defense and related expenses; 20% for
social programs; 9% for community development; 8% for interest on the debt;
and 2% for law enforcement and general government expenses.257 Of these
outlays, a relatively small percentage goes to the means-tested social welfare
programs, in contrast to those for unemployment and Social Security.258
249. Id.
250. Livingston, supra note 1, at 561.
251. The Agency, Its Mission and Statutory Authority, INTERNAL REVENUE SERV.,
http://www.irs.gov/irs/article/0,,id=98141,00.html (last visited Jan. 1, 2010).
252. Livingston, supra note 1, at 561–62.
253. Id. at 562.
254. The Debt to the Penny and Who Holds It, TREASURYDIRECT, http://www.treasury
direct.gov/NP/BPDLogin?application=np (as of Sept. 17, 2010).
255. ABRAMOVITZ & MORGEN, supra note 30, at 103.
256. Id. at 79–82.
257. 1040A—Main Contents, IRS.GOV, http://www.irs.gov/instructions/i1040a/ar02.html#
d0e59772 (last visited June 10, 2011).
258. ABRAMOVITZ & MORGEN, supra note 30, at 59 (stating that in 2003 the federal
government spent 61% of its outlays on programs that serve large numbers of people, like
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In addition to the regular budget, the United States has a tax expenditure
budget that lists various policy categories and lost revenues from various tax
exemptions, deductions, and credits.259 These tax expenditures cost the
government more than the amounts spent on social welfare programs.260 For
example, “[i]n 2002, $609 billion was spent on fiscal welfare. This is $320
billion more than was spent on non-defense discretionary programs . . . $323
billion more than on means-tested programs . . . and $156.9 billion more than
on on Social Security.”261 Many of the largest tax expenditure programs are
for homeowners or individuals with higher education expenses, employersponsored health insurance coverage, or employer-sponsored retirement
pensions—expenditures involving savings and wealth of no benefit to poor
working mothers.262 Furthermore, in recent years these tax expenditures have
expanded and widened the gap between the social welfare programs and those
from the tax code.263
2.
Vertical Equity
The United States federal tax systems (income and social security) do not
primarily focus on vertical equity. The federal income tax seems to focus on
economic policies, including those involving consumption and savings. The
federal income tax base is riddled with preferences for the wealthy and most
state tax systems are regressive.
a.
Tax Base
The major income generating taxes in the United States are personal
income taxes; Social Security and Medicare taxes; corporate income taxes; and
excise, estate, and gift and other similar taxes. In 2009, 43% of the revenue
came from the individual income tax system, including tax on capital income,
42% arose from social insurance and retirement receipts, 7% from corporate
unemployment insurance, social security, but only 12% for Medicaid, TANF and other meanstested programs).
259. See STAFF OF J. COMM. ON TAX’N, 106TH CONG., ESTIMATES OF FEDERAL TAX
EXPENDITURES FOR FISCAL YEARS 2005–2009, at 1 (J. Comm. Print 2005) [hereinafter
ESTIMATES].
260. ABRAMOVITZ & MORGEN, supra note 30, at 59.
261. Id. at 59–60.
262. Id. at 47–49. For example, in fiscal year 2011, the housing related tax expenditures was
$221.3 billion, OFFICE OF MGMT. & BUDGET, ANALYTICAL PERSPECTIVES: BUDGET OF THE U.S.
GOVERNMENT: FISCAL YEAR 2011, at 210, 212 (2010), available at http://www.gpoaccess.gov/us
budget/fy11/pdf/spec.pdf, twice as much as the direct budgetary expenses for rental and public
housing. ABRAMOVITZ & MORGEN, supra note 30 at 60 (citing CTR. FOR CMTY. CHANGE, CTR.
FOR ECON. & POLICY RESEARCH, THE CRISIS IN AMERICA’S HOUSING: CONFRONTING MYTHS
AND PROMOTING A BALANCED HOUSING POLICY (2005), available at http://www.nlihc.org/doc/
housingmyths.pdf).
263. ABRAMOVITZ & MORGEN, supra note 30, at 61–62.
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income tax, 4% from estate, gift, and excise taxes, and 4% from other
sources.264
In the United States, Social Security is a mandatory supplemental
retirement system established in 1935 as part of President Franklin Delano
Roosevelt’s New Deal.265 Social Security was motivated by the events of the
Great Depression during which many unemployed workers and retired elderly
were left in poverty.266 The Social Security program was intended to ensure
that any wage-earner who paid into the system would receive benefits that did
not fall below a basic subsistence level.267 From its inception, however, it
allowed for benefits to “house spouses.”268 For example, if a woman has never
worked in the market but is married to a worker husband, she may claim Social
Security through him.269 If she works, she can claim her benefits or 50% of
her husband’s, whichever is greater.270 If she gets divorced but has been
married for ten years, she also can claim under her ex-husband.271 Lastly, if
she is widowed and has not remarried at retirement age, she also may claim
through her deceased spouse.272 Social Security is funded out of payroll taxes,
i.e. a certain percentage of a worker’s paycheck (currently 12.4%) goes
directly into the Social Security fund to help provide benefits to current
recipients up to a base amount of $106,800.273 In recent years, current workers
have complained that the system is unsustainable and will not be available
264. OFFICE OF MGMT. & BUDGET, BUDGET OF THE U.S. GOVERNMENT: FISCAL YEAR 2011,
at 149 tbl.S-3 (2010), available at http:/www.gpoaccess.gov/usbudget/fy11/pdf/budget.pdf.
265. Abraham Epstein, “Social Security” Under the New Deal, 141 THE NATION 261 (Sept.
4, 1935), available at http://www.thenation.com/article/social-security-under-the-new-deal.
266. Id.
267. Arthur J. Altmeyer, Chairman, Social Security Board, Radio Address delivered over
Columbia Network: Goals for Social Security (Feb. 11, 1945), available at http://www.ssa.gov/
history/aja245.html.
268. Id.
269. Benefits for Your Spouse, SOC. SEC. ADMIN., http://www.ssa.gov/retire2/your
spouse.htm (last visited Jan. 1, 2010).
270. Mary E. Becker, Commentary, Obscuring the Struggle: Sex Discrimination, Social
Security, and Stone, Seidman, Sunstein & Tushnet’s Constitutional Law, 89 COLUM. L. REV. 264,
280 (1989).
271. Benefits for Your Divorced Spouse, SOC. SEC. ONLINE, http://www.ssa.gov/retire2/your
divspouse.htm (last visited Jan. 9, 2011).
272. SOC. SEC. ADMIN., SURVIVORS BENEFITS 10 (2011), available at http://www.ssa.gov/
pubs/10084.pdf.
273. KATHY RUFFING, CTR. ON BUDGET & POLICY PRIORITIES, A CASE FOR SOCIAL
SECURITY COST-OF-LIVING ADJUSTMENT IN 2010 IS WEAK: IF POLICYMAKERS FEEL A NEED TO
ACT, THEY SHOULD CONSIDER A ONE-TIME PAYMENT 6 (2009), available at http://www.cbpp.
org/files/10-14-09bud.pdf.
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when they retire.274 The Medicare tax is a flat rate of 1.45% but has no income
limit.275
Corporate income in the United States is subject to a double tax.276
Corporate income is first taxed to the corporation and then taxed again when
the income is distributed to the shareholders of the corporation, at a reduced
rate.277 A shareholder is allowed “a deduction for a percentage of the dividend
a corporate shareholder receives,” which will depend on the level of
shareholding.278 Corporate income tax also has an alternative minimum tax
(AMT) that is levied at 20%, after the $40,000 allowance, which gets phased
out.279 Unlike individual income, corporate income does not enjoy a reduced
rate of tax on capital gains.280
Under the federal income tax system, all working moms, whether filing
jointly or as head of household, can qualify for the dependency exemption, as
well as the Child Tax Credit, if they do not make too much money.281 The
dependency exemption allows a parent to decrease his or her taxable income
for each person they support.282 In order for the parent to claim a dependency
exemption, the child must meet certain characteristics and must not claim a
personal exemption on their own tax return.283 In order to claim the per child
credit, the taxpayer must not make over a certain amount of adjusted gross
income.284 For lower income taxpayers, the credit is partially refundable and
was recently amended to include more than two children.285 As an alternative,
or in addition to the credit, some employers subsidize child care as a nontaxable fringe benefit.286 Lastly, poor wage earning mothers can obtain the
earned income tax credit (EITC).287 “According to Census Bureau data, the
274. Thomas N. Bethell, Social Security: Where Do We Go From Here? Americans Count on
the 75 Year System, AARP (July 1, 2010), http://www.aarp.org/work/social-security/info-072010/social_securitywhere_do_we_go_from_here.html.
275. SOC. SEC. ADMIN., UPDATE 2010: ELECTRONIC FACT SHEET (2010), available at
http://www.ssa.gov/pubs/10003.pdf.
276. AULT ET AL., supra note 1, at 145.
277. Id.
278. Id.
279. Id. at 146.
280. Id. at 145.
281. I.R.C. § 152 (2006); see also I.R.C. § 24 (2006).
282. Id. § 152(c); INTERNAL REVENUE SERV., DEP’T OF TREASURY, PUBLICATION 501,
EXEMPTIONS, STANDARD DEDUCTION, AND FILING INFORMATION 11 (2010), available at
http://www.irs.gov/pub/irs-pdf/p501.pdf.
283. INTERNAL REVENUE SERV., supra note 282, at 12.
284. I.R.C. § 24(b) (2006).
285. Id. § 24(d).
286. Id. § 129.
287. ABRAMOVITZ & MORGEN, supra note 30, at 50.
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EITC lifts 4.9 million people above the poverty level annually, including more
than 2.7 million children.”288
Scholars have disagreed over whether children in America are public
goods, investments, or consumers.289 In the U.S. tax system, children are
generally considered the personal consumption and responsibility of the
parent.290 Child care expenses are deemed personal expenses that do not
qualify for a deduction as an ordinary business expense.291 Although child
care expenses are not deductible, there is a limited credit that provides for
employment-related child or dependent care expenses.292
In general, housework and child care in the United States are not taxed.293
It is recognized that housework is performed predominantly by women, and
one feminist scholar, Nancy Staudt, has suggested that this work should be
valued and taxed in order “to ensure women have access to social welfare
benefits typically tied to waged labor, such as social security, disability, and
Medicare benefits.”294 On the other hand, other scholars have pointed out the
difficulties surrounding the valuation of housework, including the complexity
of determining a satisfactory formula for calculating its value and identifying
the proper taxable unit, as well as the potential of harming single mothers.295
The U.S. federal income tax system is riddled with exemptions,
deductions, and credits. This has led one commentator to predict that “the
income tax will become a misnomer—it will really be a salary tax.”296 From a
working mother’s perspective, there seem to be three major problems with the
federal income tax base. First, the savings tax benefits, such as those for
retirement, education, and health, are favored. These subsidies are unavailable
to those who are unable to save.297 Second, many of the subsidies for
consumption items are of no benefit to the working mom.298 Third, the system
favorably taxes certain investment income.299
288. Id. at 51. Unfortunately, many people, including a disproportionate number of
minorities, are unaware of their eligibility. Id. at 57–58.
289. O’Kelley, supra note 23, at 378–79.
290. Id. at 377. Child care is one of the largest expenses that many families have. See Stacey
L. Bradford, Cut Your Child-Care Costs, SMARTMONEY (Feb. 5, 2010), http://www.smart
money.com/Personal-Finance/Taxes/Cut-Your-Child-Care-Costs-14246.
291. O’Kelley, supra note 23, at 377.
292. See AULT ET AL., supra note 1, at 216.
293. But see Staudt, supra note 33, at 1576.
294. Id. at 1647.
295. Shurtz, supra note 70, at 514, 515.
296. Allan Sloan, Why Your Tax Cut Doesn’t Add Up, NEWSWEEK, Apr. 12, 2004, at 42.
297. See ABRAMOVITZ & MORGEN, supra note 30, at 57.
298. See id. at 55.
299. See id. at 56–57.
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Perhaps the largest amount of federal tax subsidies goes to retirement.300
Retirement is important for working mothers, but they are more dependent on
Social Security because of their lower wages.301 Nevertheless, the federal tax
system provides numerous employer-based and private tax incentives to
motivate citizens to save for their own retirement. These include “Individual
Retirement Accounts (IRAs), 401(k)s, Keogh Plans, or Simplified Employee
Pensions (SEPs).”302 In addition, there is a credit for retirement savings
Ironically, the
contributions for low or moderate income earners.303
contribution limits for the traditional IRA and the Roth IRA were increased to
allow older women over the age of fifty-five to “catch-up” by contributing
more to these savings plans.304 Unfortunately, women who cannot save money
cannot benefit from this provision.
Another large tax expenditure item is education.305 Paying for college is
important to working moms and has become increasingly difficult in
America.306 College tuition has risen disproportionately to wages,307 and
students often end up with heavy loans to pay off.308 To assist taxpayers with
paying for college for their children or themselves, the IRS provides tax
benefits for those who are saving for or paying college tuition. These include:
the Qualified Tuition Program (QTP); the Coverdell Education Savings
Account (ESA); the Education Savings Bond Program; the Education
Exemption to Additional Tax on Early IRA Distributions; the American
Opportunity Credit; the Lifetime Learning Credit; the Student Loan Interest
Deduction; and Tuition and Fees Deduction.309 One of the major problems
300. See id. at 33.
301. Id. at 35, 53–54.
302. ABRAMOVITZ & MORGEN, supra note 30, at 54.
303. I.R.C. § 25B (2006).
304. Id. § 219.
305. See ESTIMATES, supra note 259, at 35. See also Ruth Lynch Buchwalter, Note, Should
1+1=2?: Does the Structure of Federal Income Tax Expenditures for Higher Education
Disadvantage Women and Low-Income Individuals?, 22 WOMEN’S RTS. L. REP. 77 (2000).
306. With the recent budget cuts the ability of students to obtain subsidized loans and low
interest rates has been diminished. See Jeanne Sahadi, CBO: Debt Ceiling Cuts at Least $2.1
Trillion, CNN.COM (Aug. 1, 2011), http://money.cnn.com/2011/08/01/news/economy/debt_
ceiling_ deal_cbo.
307. SHURTZ, supra note 222, at 9–10 (explaining the cost of tuition at a four-year public
institution jumped 38% in the last decade. For the 2008–2009 academic year, the total average
cost of a four-year public school was nearly $20,000. Tuition increases have exceeded inflation
and wage increases).
308. PROJECT ON STUDENT DEBT & NAT’L CTR. FOR EDUC. STATISTICS, QUICK FACTS
ABOUT STUDENT DEBT 1 (2010), available at http://projectonstudentdebt.org/files/File/Debt_
Facts_and_Sources.pdf.
309. INTERNAL REVENUE SERV., DEP’T OF TREASURY, PUBLICATION 970, TAX BENEFITS
FOR EDUCATION (2009), available at http://www.irs.gov/publications/p970.
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with these subsidies is that working mothers who do not have the ability to
save310 cannot benefit from these education savings techniques, and the credits
are unavailable to upper income single mothers, who are treated as single
under the phase-out rules.311 The student loan interest is a per return benefit
and thus is unavailable to two-earner married couples, both of whom have
student loans.312
Health care is another major concern among working moms. Half of
workers in the lowest-wage jobs and half of those in mid-range jobs, as well as
a quarter of those in higher salary jobs, either had problems paying medical
bills in a twelve-month period or were paying off accrued debt.313 If one
member of a family is uninsured and has an accident or costly medical
treatment, the resulting medical bills can affect the entire family’s economic
stability.314 A survey showed that more than 25% said that housing problems
resulted from medical debt, including the inability to pay rent or mortgage, and
the development of bad credit ratings.315 Researchers recently found that the
average out-of-pocket medical debt for those who filed for bankruptcy was
$11,854.316 Significantly, 75.7% of those who filed for bankruptcy had health
insurance coverage.317 Furthermore, 54% of all bankruptcy filings were partly
the result of medical expenses.318 To help Americans afford health care, the
federal government gives tax breaks for health-related savings and
expenditures, e.g., the Health Savings Account, Medical Savings Accounts,
Flexible Spending Arrangements, Health Reimbursement Arrangements, et
cetera.319 However, working mothers have difficulty saving under these
310. See Health Savings Accounts (HSAs) and Consumer Driven Health Care: Cost
Containment or Cost Shift?: Hearing Before the Subcomm. on Health of the H. Comm. on Ways
and Means, 110th Cong. 29 (2008) (statement of Judy Waxman, Vice President & Dir. of Health
& Reproductive Rights, Nat’l Women’s Law Ctr.) [hereinafter Statement of Waxman], available
at http://www.nwlc.org/pdf/HSAtestimonyJwaxman.pdf (explaining women cannot afford Health
Savings Accounts).
311. See I.R.C. § 25A(d)(2)(A) (2006).
312. SHURTZ, supra note 222, at 512.
313. Sara R. Collins et al., Wages, Health Benefits, and Worker’s Health, COMMONWEALTH
FUND ISSUE BRIEF, Oct. 2004, at 6.
314. COMM. ON THE CONSEQUENCES OF UNINSURANCE, INST. OF MED., NO. 3, HEALTH
INSURANCE IS A FAMILY MATTER 3 (2002).
315. ROBERT W. SEIFERT, ACCESS PROJECT, HOMESICK: HOW MEDICAL DEBT UNDERMINES
HOUSING SECURITY 1 (2005).
316. David U. Himmelstein et al., Marketwatch: Injury and Illness as Contributors to
Bankruptcy, HEALTH AFFAIRS (Feb. 2, 2005), http://content.healthaffairs.org/content/supp1/2005/
01/28/hlthaff.w5.63.DC1.
317. Id.
318. Id.
319. INTERNAL REVENUE SERV., DEP’T OF TREASURY, PUBLICATION 969, HEALTH SAVINGS
ACCOUNTS AND OTHER TAX-FAVORED HEALTH PLANS (2009), available at http://www.irs.gov/
publications/p969/ar02.html.
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plans.320 The United States Congress recently passed a form of universal
health care.321 Unlike the single-payer system of Sweden and much of Europe,
the United States’ form of universal health care allows employees to keep their
current employer-provided plans.
The second problem with the federal income tax base is that consumption
items of the wealthy (such as primary homes and vacation home purchases)
322
—which are not available to many working mothers—are subsidized.
Affordable housing is a significant concern of working mothers, yet U.S.
housing (nontax) subsidies are inadequate.323 Families who pay more than
30% of their income toward housing have difficulties meeting the other
necessities of life such as food, clothing, medical care, and transportation.
These families are considered cost-burdened.324 Housing costs are particularly
high in cities, and this has created housing challenges “not only for lowerincome groups that traditionally face such hardships, . . . but also for teachers,
nurses, firefighters, police officers, and other moderate-income workers.”325
“Eighty per cent of the 1,000 large and small American cities surveyed by the
National League for Cities in 2007 reported that rising housing costs are
putting a severe strain on families.”326 Census data shows “that the home
ownership rate for families headed by women was almost 16 percent lower”
than for other citizens.327 Unfortunately, the federal government uses multiple
tax incentives for home-ownership,328 e.g., home mortgage interest deductions,
home equity interest deductions, deductions for penalty for early payoff of
mortgage, deductions for loan origination, and real estate taxes. However,
these deductions are upside-down subsidies that favor high income
320. Statement of Waxman, supra note 310.
321. See Patient Protection and Affordable Care Act, Pub. L. 111-148 § 4107, 124 Stat. 119,
560–61 (2010) (codified as amended in scattered sections of U.S.C.). When parents are unable to
afford the necessities for children, the government often provides a safety-net. Lance Freedman,
Commentary, America’s Affordable Housing Crisis: A Contract Unfulfilled, 92 AM. J. PUB.
HEALTH 709, 710 (2002). School lunches, food stamps, and Medicaid, which provides health
care, are all available. Id. The amount of direct government support flowing to the needy varies
by each state within the United States.
322. I.R.C. § 163(h) (2006).
323. Id. The U.S. Department of Housing and Urban Development defines housing as
“affordable” if the tenants or owners pay no more than 30% of their income on housing.
Affordable Housing, U.S. DEP’T OF HOUSING & URBAN DEV., http://www.hud.gov/offices/
cpd/affordablehousing/index.cfm (last visited June 10, 2011).
324. Id.
325. Tony Favro, Affordable Housing Crisis Casts a Shadow over the American Dream, CITY
MAYORS SOC’Y (Jan. 20, 2007), http://www.citymayors.com/society/housing_usa.html.
326. Id.
327. ABRAMOVITZ & MORGEN, supra note 30, at 55.
328. Id. at 52.
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taxpayers.329 Thus, working mothers that rent or have low incomes receive no
benefit from these provisions.
Another itemized deduction that favors the high income taxpayer is the
charitable deduction.330 The majority of taxpayers who take the standard
deduction will receive no benefit from this. To the extent the charitable funds
go to the things which working mothers and children need, then this deduction
should remain. However, to the extent that art, music, and other charities are
benefited, the deduction could be modified.
Lastly, the federal income tax favors certain investments that depend on
excess disposable income or savings. Certain investments, such as those for
municipalities, are tax-exempt.331 Other investments, such as capital gains and
dividends, are favorably taxed.332 The estate tax was repealed in 2010 and
after the Tax Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010, taxpayers can transfer $5 million tax free at death or
during their life.333
The last general complaint about the bases of the various tax systems is
that earnings are doubly or triply taxed. First, the federal income tax taxes
earnings. Second, Social Security taxes earnings. Third, most states, and some
localities, tax earnings. “[T]hree-fourths of families pay more in payroll taxes
[i.e., social security] than income taxes.”334
b.
Tax Rates
U.S. federal income taxes are slightly progressive—with rates up to
36.9%.335 In 2010, the personal and dependency exemption provided an
inflation-adjusted exemption of $3,650 and an inflation-adjusted standard
deduction of $5,700 for the single taxpayer, $8,350 for the head of household,
or $11,400 for married couples.336 The Social Security rates, on the other hand
are regressive, and there are no exemptions.337 The Social Security tax rate is
flat on salary capped at a certain amount.338 Just recently, the United States
adopted a system similar to that of Sweden—the Social Security base will now
329. Id. at 55.
330. I.R.C. § 170 (2006). See also ABRAMOVITZ & MORGEN, supra note 30, at 57.
331. See I.R.C. § 103.
332. ABRAMOVITZ & MORGEN, supra note 30, at 73.
333. Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,
Pub. L. 111-314, 124 Stat. 3296 (codified as amended in scattered sections of U.S.C.).
334. Id. at 84.
335. I.R.C. § 1 (2006).
336. INTERNAL REV. SERV., IRS REV. PROC. 2008-66, at 11–12 (2008).
337. ABRAMOVITZ & MORGEN, supra note 30, at 77.
338. Id. The current cap is $106,800. SOC. SEC. ADMIN., UPDATE 2011, SSA Pub. No. 0510003 (2011), available at http://ssa.gov/pubs/10003.html.
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include rents and other capital income for high-income taxpayers.339 Another
facet of the U.S. income tax is the alternative minimum tax (AMT), which was
employed to prevent significant tax liability avoidance through the use of
exclusions, deductions, and credits.340 Unfortunately, the AMT can hurt
lower-income taxpayers, especially those with children.341
Capital income in the United States is taxed according to long-term and
short-term capital gains.342 Short-term capital gains include investments that
have been held for a year or less343 and are taxed at the investor’s ordinary
income tax rate.344 Long-term capital gains include investments that have been
held for over a year345 and are taxed favorably.346 Capital income also includes
“qualified dividends.”347 Accordingly, for 2008–2010, the tax rate on eligible
dividends and long-term capital gains is 0% for those taxed at a rate below
25%.348 For others, the rate is 15%.349
All except seven states have an income tax and the state rates are much
lower than the federal rates.350 Sometimes the state will exempt capital
income, and other times the state will tax capital income.351 Most states also
have a sales tax. Although the rates that vary widely, they are generally
considered regressive.352 Currently no VAT exists at the federal level, but one
is proposed.353
339. See Patient Protection and Affordable Care Act, Pub. L. 111-148 § 4107, 124 Stat. 119,
560–61 (2010) (codified as amended in scattered sections of U.S.C.).
340. ABRAMOVITZ & MORGEN, supra note 30, at 86.
341. Id. at 87.
342. I.R.C. § 1222 (2006).
343. Id. § 1222(1).
344. William Perez, Capital Gains Holding Periods: Long Term and Short Term,
ABOUT.COM (Dec. 20, 2010), http://taxes.about.com/od/captialgains/a/CapitalGainsTax_2htm.
345. I.R.C. § 1222(3) (2006).
346. Id. § 1222.
347. Id. § 1(h)(3).
348. Id. § (h)(1)(B).
349. Id. § 1(h)(1)(C).
350. ROBERT P. MURPHY & JASON CLEMENS, TAXIFORNIA: CALIFORNIA’S TAX SYSTEM,
COMPARISONS TO OTHER STATES, AND THE PATH TO REFORM IN THE GOLDEN STATE, PACIFIC
RESEARCH INSTITUTE 34 tbl.4 (2010) (Alaska, Florida, Nevada, South Dakota, Texas,
Washington, and Wyoming).
351. Trevor, Capital Gains Tax Rates-State by State, THEREIBRAIN.COM BLOG (Oct. 18,
2007), http://www.thereibrain.com/realestate-blog/2007/10/capital-gains-tax-rates-state-by-state.
352. California has one of the highest rates with 8.25%. Id. See MURPHY & CLEMENS, supra
note 350, at 51 tbl.7.
353. Cait Murphy, VAT: Will the U.S. Adopt a Value-Added Tax?, CBSNEWS.COM (Apr. 7,
2010, 12:04 PM), http://www.cbsnews.com/8301-503983_162-20001918-503983.html.
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Tax Unit
The taxable unit in the United States under the federal income tax system
is the married couple, although originally it was the individual.354 As it
currently stands, the married couple filing jointly enjoys a different rate
schedule, which provides broader brackets for lower rates than those imposed
on heads of household and single taxpayers.355 However, when a working
mother combines her income with a working husband, she incurs a “marriage
penalty.”356 Thus, her marital status can impact her taxes.
The United States also has a tax category for heads of household (often
single moms with children) with rates between that of single taxpayers and
married couples.357 This category also gives those individuals a higher
standard deduction than those filing as single.358 An individual can file as a
head of household if he or she is unmarried, pay more than half the costs of
keeping up a house, and has a qualifying person (such as a minor child) living
with him or her.359 For example, under the 2010 federal income tax rates, a
single taxpayer filing individually who has a taxable income of $80,000 would
owe $16,188 in taxes, while a head of household with the same taxable income
would owe $14,854.360 Similarly, while a single taxpayer is eligible for a
standard deduction of $5,700 in 2010, a taxpayer filing as a head of household
is allowed a standard deduction of $8,350.361
Scholars have criticized the joint filing system as perpetuating an outdated
perception that the proper gender role of women is in the home, rather than in
the workplace.362 This economic inefficiency taxes the lower-earning spouse,
typically the wife, at the same marginal rate of the higher earning spouse,
thereby creating a disincentive for the wife to perform market labor.363 The
taxable unit has also been criticized as discriminatory against two-earner
couples,364 head of household taxpayers,365 singles,366 and gay and lesbian
354. Shurtz, supra note 70, at 497–98.
355. AULT ET AL., supra note 1, at 139.
356. Lawrence Zelenak, Marriage and the Income Tax, 67 S. CAL. L. REV. 339, 340 (1994).
357. AULT ET AL., supra note 1, at 139–40.
358. Id. at 144.
359. Black et al., supra note 37, at 1398.
360. I.R.S., 2010 TAX TABLE 86, available at http://www.irs.gov/pub/irs-pdf/i1040tt.pdf?port
let=3.
361. INTERNAL REV. SERV., IRS REV. PROC. 2008-66, at 11–12 (2008).
362. See, e.g., Blumberg, supra note 3, at 90 (citing Oliver Oldman & Ralph Temple,
Comparative Analysis of the Taxation of Married Persons, 12 STAN. L. REV. 585, 601–02
(1960)).
363. Shurtz, supra note 70, at 499.
364. See MCCAFFERY, supra note 32, at 83.
365. See Black et al., supra note 37, at 1397.
366. Lily Kahng, One is the Loneliest Number: The Single Taxpayer in a Joint Return World,
61 HASTINGS L.J. 651 (2010).
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couples,367 many of whom function in the same way as traditional families.
Many scholars have thus called for reform in this area, most particularly the
adoption of the individual unit,368 that has been adopted by both Sweden and
Singapore.
II. LESSONS LEARNED: U.S. AGENDA FOR REFORM
What the earlier discussion illustrates is that many features of the current
U.S. tax system should be modified to accommodate the interests of working
mothers. Lessons can be learned from both Sweden and Singapore. For
example, macro tax policy suggestions include using more direct subsidies,
focusing more on efficiency, making the rate structure more progressive,
modifying the tax base, and changing the taxable unit. The micro tax policies
deal with the specific issues of concern to working moms, such as those for
child care, health care, housing, and education.
A.
Lessons from Sweden: Direct Subsidies and a Focus on Equity
The Swedish support model is ideal for working mothers. The Swedish
system has widespread direct subsidies, such as those for child care and health
care,369 that provide great services to all citizens, often with fees charged based
on income levels.370 Furthermore, these universal services seem to be of
uniformly high quality.371 Sweden’s tax system is based on principles of
equity, which feature progressive tax rates and the individual unit.372
The advantages of direct subsidies over tax subsidies were touted by
Stanley S. Surrey in his classic 1970 law review.373 He argues that direct
subsidies are better than tax subsidies because they are more equitable, prevent
windfalls, are economically efficient, and do not distort the base or rates.374
He asserts that tax incentives confuse and divide “authority in the legislative
and administrative processes,” make maintaining budgetary control difficult,
cause “confusion in perceiving and setting national priorities, and [pose]
367. See Patricia A. Cain, Taxing Lesbians, 6 S. CAL. REV. L. & WOMEN’S STUD. 471 (1997).
368. See Pamela B. Gann, Abandoning Marital Status as a Factor in Allocating Income Tax
Burdens, 59 TEX. L. REV. 1 (1980); Davis, supra note 65. Some have argued for the household.
See, e.g., Frederick R. Schneider, Which Tax Unit for the Federal Income Tax?, 20 U. DAYTON L.
REV. 93 (1994).
369. Dana Polk, For Models of Universal Child Care Check out the (International)
Neighbors, CHILD. ADVOC., May/June 1997, available at http://www.4children.org/issues/1997/
may-june/for_models_of_universal_child_care_check_out_the_international_neighbors.
370. Id.
371. See Dowd, supra note 4, at 594.
372. Id.
373. Surrey, supra note 35, at 737–38.
374. See id. at 719, 720, 725.
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dangers to the tax structure itself.”375 A more recent law review article by
Mary Heen compares direct subsidies with tax subsidies involving child
care.376 She concludes that the tax system has serious administrative and
equity problems and is generally inferior to direct subsidies for children.377
Direct subsidies already exist in the United States and generally work quite
well. Social Security, Medicare, Medicaid, public education, and financial aid
for higher education are all examples of direct subsidies.378 Social Security,
for example, has drastically lowered the poverty rate among the elderly and
“provides over 40 percent of the income of people 65 and older.”379 It was
instrumental in reducing women’s poverty since women are more dependent
than men on these benefits.380 Health care has recently become universal.381
What the United States needs now is a universal preschool. This would
support our mothers and children while serving the country’s needs to remain a
competitive global leader.
B.
Lessons from Singapore: An Efficient Tax System with Comprehensive
Base and Care Subsidies
The tax system of Singapore also offers lessons for the United States.
First, a tax system with a comprehensive base will work to provide adequate
revenues even with low tax rates and large exemptions.382 Second, a tax
system need not be complicated to be effective.383 Third, calculation of the tax
at the national level could result in large efficiencies.384 Fourth, subsidies can
be used within the tax system to provide support for important care-giving
functions.385 When combined with direct subsidies for quality health care,
375. Id. at 734.
376. See Mary L. Heen, Reinventing Tax Expenditure Reform: Improving Program Oversight
Under the Government Performance and Results Act, 35 WAKE FOREST L. REV. 751, 761 (2000).
377. Id. at 814 (discussing direct subsidies in general).
378. Id. at 757 nn.18, 19.
379. Thomas N. Bethell, Social Security: Where Do We Go From Here?, AARP BULL. (July
1, 2010), available at http://www.aarp.org/work/social-securityinfo-07-2010/social_security
where_do_we_go_from_here.html. The poverty rate among the elderly has been reduced from
35% in 1960 to less than 10% today. Id.
380. See A. Barry Rand, Protect Social Security, AARP BULL. (July 1, 2010), available at
http://www.aarp.org/work/social-security/info-07-2010/protect_social_security_.html. In 2008,
48.4% of a woman’s (65 and older) retirement income came from Social Security. Id. This
contrasts with only 33.7% for men. Id.
381. See Patient Protection and Affordable Care Act, Pub. L. 111-148 § 4107, 124 Stat. 119,
560–61 (2010) (codified as amended in scattered sections of U.S.C.).
382. See text accompanying notes 182–91.
383. See text accompanying notes 154–60.
384. See text accompanying notes 155–57.
385. See text accompanying notes 174–75.
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child care, elder care, and education, such a system could serve as a model to
emulate.
Unfortunately, Singapore does not provide universal subsidies for child or
elder care. Instead, these care functions are largely provided only to higher
income taxpayers through the tax codes various deduction provisions.386 The
United States has already eliminated the deduction route for dependent care387
and has changed to the credit system to provide fairer benefits.
The Singapore state wants women to work in the marketplace. However it
does not provide universal preschool, child care, or elder care. Additionally,
there is wide disparity of income or wealth among the classes in Singapore,
particularly between the guest workers and the residents.388 A similar model
on a reduced scale exists and is thriving in the United States.389 Theoretically,
the United States has minimum wage laws, Social Security laws, and other
laws that might apply in this setting, and thus be distinguishable from that of
Singapore. However, child care in the home in the United States is on a
private, cash basis, and is unregulated.390
C. Additional Macro Proposals
Although it may not be politically feasible to adopt the same tax systems as
Sweden or Singapore, the United States can nevertheless learn lessons from
those countries on how to restructure their tax system to favor working
mothers. Working women’s lives would be made better by providing them
with greater financial support391 and directing to them a greater flow of wealth.
The tax base, tax rates, and tax unit in the United States should all be examined
and modified.
1.
Tax Base
Several modifications in the tax base should be made to accommodate the
interests of working mothers. First, since most of mothers’ income comes in
the form of earnings,392 double (or triple) tax on such earnings should be
reduced or eliminated.393 The Social Security system could be integrated into
the income tax system or made fairer with an exemption, similar to that in the
386. See supra text accompanying notes 200–08.
387. See discussion supra Part I.C.2.
388. See supra note 12 and accompanying text.
389. See Mary Louise Fellows, Rocking the Tax Code: A Case Study of Employment-Related
Child-Care Expenditures, 10 YALE J.L. & FEMINISM 307, 315 (1998).
390. See Marc Linder, What Hath Zoe Baird Wrought? The New FICA Amendments on
Domestic Service Employers, 66 TAX NOTES 113, 113–15 (1995).
391. The tax code, however, can only deal with financial help. What women need is a
dismantling of the sexual division of labor at home, and/or more direct subsidies from the state.
392. See supra note 304 and accompanying text.
393. See supra note 334 and accompanying text.
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federal income tax system. Scholars Yin and Foreman have proposed
providing an exemption of a certain amount of wages from the Social Security
wages of poor workers, augmented by a refundable “family allowance,” much
like the allowance provided under the Swedish system.394 Such a proposal
would go a long way toward providing equity to working mothers, particularly
single working moms. A better proposal may be to expand the Social Security
base to include rents and other investment income of high income taxpayers,
like that of the Swedish tax system. Lastly, to address regressive state taxing
schemes, a refundable credit for low income taxpayers could be enacted.
Another important reform would be to broaden the federal income tax base
by eliminating some of the hybrid savings features of the system.395 Provisions
in the income tax system that favor savings, such as those for retirement,
education, and health care should be eliminated or modified. Since most
working mothers are not able to save,396 these tax incentives do not favor them.
The budgeted dollar amounts for these saving programs—the Section 529 plan,
the Coverdell, savings bond interest, et cetera,397—could then be used for
direct subsidies or pay-as-you-go tax measures that have a refundable
component. For example, the code is full of tax subsidies that favor college,
yet until recently the pay-as-you go techniques, such as the Hope Scholarship
Credit, the Lifetime Learning Credit or the Tuition and Fees Deduction, did not
have a refundable feature. The American Opportunity Credit has a refundable
feature;398 however, higher-income single mothers are ineligible for the
benefit.399 Those mothers also would not be likely to qualify for the financial
aid subsidies. The post-college loan interest benefit may also not be available
to them.400
Similarly, the retirement tax savings provisions provide the largest
expenditure item in the tax expenditure budget.401 Yet, many women with
their lower wages and increased consumption expenditures (due to work and
child related expenses) are not able to take advantage of some of the “catchup” IRA deduction provisions that were intended for their benefit.402 Although
394. See George K. Yin & Jonathan Barry Forman, Redesigning the Earned Income Tax
Credit Program to Provide More Effective Assistance for the Working Poor, 59 TAX NOTES 951,
957–60 (1993).
395. See Boris I. Bittker, A “Comprehensive Tax Base” as a Goal of Income Tax Reform, 80
HARV. L. REV. 925 (1967).
396. Min Zhan, Savings Outcomes of Single Mothers in Individual Development Accounts 1
(Washington Univ. Ctr. for Soc. Dev., Working Paper No. 03-07, 2003).
397. See discussion supra Part I.C.2.a.
398. Black et al., supra note 37, at 1401.
399. Id.
400. Id.
401. See supra note 300 and accompanying text.
402. ABRAMOVITZ & MORGEN, supra note 30, at 47–49.
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Social Security may be available to working women (and studies show they are
more dependent on this income than men) these subsidies are inadequate, due
to women’s lower labor wages. Therefore, the budgeted dollar amounts from
these savings programs could be redirected to increase the minimum Social
Security entitlement. Similar discrimination results from the health savings
accounts.403 Here, women may not be able to save and may not be adequately
covered under an employer plan.
In all of these circumstances, working mothers would be better served if
the savings provisions were modified or eliminated—and the saved funds
directed to refundable pay-as-you-go tax benefits or direct subsidies.
A third proposal would be to tax both investment and capital income the
same as earned income. Under the Haig-Simons definition of income, income
is consumption plus savings.404 The definition does not indicate that savings
should be taxed more favorable.405 Working women who have little savings do
not benefit when savings are exempt or treated favorably under the income tax
system.406 Therefore, savings, such as dividends and capital gains, should be
taxed the same as earned income. This proposal would serve horizontal equity
and simplicity. The supply side economic “trickle down” theory is not
persuasive.407 In this recessionary economy, cash flows are going outside the
country, and the theory that the rich will take the risks to create wealth for
others has changed. Consumption, however, is local. Therefore, the demand
theory that consumption drives factory orders, and thus the economy, is the
better view.408
Lastly, certain consumption expenses of the wealthy should not be
subsidized in the federal income tax system. Rather, consumption expenses of
working mothers should be favored. For example, no deduction should be
allowed for the mortgage interest on a vacation home. If most working
mothers rent, then all mortgage interest deductions should be eliminated—or a
floor should be placed on these, similar to that under Section 67.409
403. C. Eugene Steuerle, Designing A Nondiscriminatory Tax Credit, HEALTH AFF., Summer
1995, at 276.
404. See JOSEPH BANKMAN ET AL., FEDERAL INCOME TAX: EXAMPLES & EXPLANATIONS 38
(5th ed. 2008).
405. Id.
406. See supra notes 30–31 and accompanying text.
407. See Mehrun Etebari, Trickle Down Economics: Four Reasons Why it Just Doesn’t Work,
UNITED FOR A FAIR ECON. (July 17, 2003), http://www.faireconomy.org/research/Trickle
Down.html.
408. David Brin, A Primer on Supply-Side vs Demand-Side Economics, OPEN SALON BLOG
(Feb. 19, 2010, 7:28 PM), http://open.salon.com/blog/david_brin/2010/02/19/a_primer_on_
supply-side_vs_demand-side_economics (arguing for demand side economics).
409. See I.R.C. § 67 (2006) (disallowing certain itemized deduction equal to 2% of the
taxpayer’s adjusted gross income).
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Alternatively, a refundable rent credit should be provided when direct
subsidies are inadequate. Similar to the analysis above, deductions for
consumption items, such as rent, should be turned into refundable credits.
Consumption items involving necessities for children and work related
expenditures should be deducted under the federal income tax system. Earlier
tax law allowed for a two-earner deduction for work related expenses.410 Both
Sweden and Singapore have such a provision.411 A more equitable tax subsidy
would be a refundable credit.
Of course, tax base issues do not just revolve around the Social Security
and federal income tax systems. Any sales tax (or a VAT, if passed) should
exempt the purchase of goods and services most common to the working mom.
In addition, any new tax initiatives, such as the VAT and carbon tax, should be
evaluated before enactment for its impact on working women and their
children.
2.
Tax Rates
The Singapore taxing system illustrates that the tax rates per se might not
be as important as the base, the exemption levels, or the taxable unit to the
welfare of working women. Where the money is spent is of key importance.
If Social Security is integrated with the income tax, then rates would have to
rise dramatically; however, instituting a comprehensive tax base and taxing
capital gains and dividends like ordinary income would reduce the rates. If
exemption levels are high, though, then rates will also need to be high.
Scholars in the field have examined the progressive rates under the federal
income tax system from a feminist point of view.412 To the extent that working
mothers fall in lower income brackets, either because of their choice of job,
their low wages, or their marital situation,413 a more progressive tax system can
result in their benefit, if redistribution results from the revenue. To the extent
that state tax systems are regressive and thus impact working mothers
adversely, then a progressive federal income tax is fairer to them.
3.
Tax Unit
Various scholars have argued that the marital unit should be abandoned in
favor of the individual. Some attack joint filing on the ground that it creates a
410. Leslie A. Whittington & James Alm, Tax Reductions, Tax Changes, and the Marriage
Penalty, 54 NAT’L TAX J. 455, 458 (2001).
411. See supra notes 139–41, 208 and accompanying text.
412. See Kornhauser, supra note 236. See also Marjorie E. Kornhauser, A Taxing Woman:
The Relationship of Feminist Scholarship to Tax, 6 CAL. REV. L. & WOMEN’S STUD. 301, 317
(1996) (discussing how her article came to be considered the “feminist progressivity” article).
413. Not only is marriage important, but divorce. Women who are lucky enough to be
connected to a payer husband with resources can reap the benefit of alimony and child support.
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disincentive for wives to perform market work.414 Others have emphasized
that two-earner couples incur more work-related expenses than one earner
couples and do not receive the value of non-taxed imputed services that single
earner couples receive.415 Some commentators think joint filing violates
“marriage neutrality,” thus discouraging some taxpayers from marrying,416
while others do not see marriage as an institution to be emulated and point out
the discrimination against cohabiting couples.417 Lastly, some scholars have
attacked the joint filing assumption that couples act as a unitary economic
entity, pooling their resources for joint purposes.418
Whatever the reasons, including complexity and inequity,419 the marital
unit should be abandoned. Sweden, Singapore, and many other countries have
demonstrated how a system using the individual unit can work fairly and
effectively.420
It is possible that politically, the unit in America will never change.
Therefore, the inequity—although not the complexity—can be resolved by
“second best” measures.421 First, married couples could be allowed to file
separately and be treated as single. Heads of household taxpayers could be
taxed as married, particularly with respect to the limitation rules. For single
working moms, the eligibility income rules and phase-outs should be doubled.
For example, the per child tax credit rules for head of household and married
couples should be the same. Single parents do not have the value of the
imputed income of the one-earner couples and have more expenses for their
children than married parents. Therefore they should have the same benefit as
one-earner couples throughout the code. Similarly, the education benefits—
Coverdell, American Opportunity Credit, and student loan interest deduction—
should have the same income level for single parents and married couples.
414. MCCAFFERY, supra note 32, at 2; Blumberg, supra note 3, at 49; Harvey S. Rosen, Is It
Time to Abandon Joint Filing?, 30 NAT’L TAX J. 423, 427 (1977).
415. Gann, supra note 368, at 20.
416. Boris I. Bittker, Federal Income Taxation and the Family, 27 STAN. L. REV. 1389, 1395–
97 (1975).
417. Patricia Cain, Same-Sex Couples and the Federal Tax Laws, 1 LAW & SEXUALITY 97
(1991); Bruce Wolk, Federal Tax Consequences of Wealth Transfers between Unmarried
Cohabitants, 27 UCLA L. REV. 1240 (1980).
418. Majorie E. Kornhauser, Love, Money, and the IRS: Family, Income-Sharing and the
Joint Income Tax Return, 45 HASTINGS L.J. 63, 96 (1993).
419. See generally Black et al., supra note 37; Kahng, supra note 366.
420. See, e.g., Dulude, supra note 2.
421. Originally the “second best” was used in welfare economics to indicate that when market
failures exist and Pareto optimality cannot be attained, other measures might be necessary. See
R.G. Lipsey & Kelvin Lancaster, The General Theory of the Second Best, 24 REV. ECON. STUD.
11 (1959). Now it is used to refer to solutions to problems that may not be the best but could still
help solve the issue.
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D. Micro Proposals
Although direct subsidies are best, the U.S. system tends to favor tax
incentives. There are a series of specific or micro tax provisions that could be
enacted to benefit working moms. For example, if universal preschool cannot
be provided, then a more liberal credit for child care should be enacted.
Similarly, a credit for the negative income tax due to second shift work could
be given. If housing and health care are not adequately provided through
direct subsidies, then refundable credits should be enacted. Lastly, a welfare
mom’s working opportunity credit should be enacted to allow for a working
mom’s expenses of employing a welfare mom, but only if she allows the
welfare mom’s children to be taken care of in the employer’s house. Lastly,
the earned income credit could be increased or a family allowance provided.
CONCLUSION
Examining the tax culture of Sweden, Singapore, and the United States
illustrates how that culture can impact working mothers welfare. Sweden
should be praised for the high value it places on women’s equality in the
marketplace and at home. With its extensive universal child care system and a
liberal maternity and paternity leave policy, it is a model for the “state support”
system for working mothers. Singapore has a less extensive support system
than Sweden, but it does provide excellent housing, health care, and education
benefits. The Singapore system is slightly less socialist than the American
system, since there is no entitlement for unemployment compensation or Social
Security retirement benefits.
Like the United States, it adopts a
“responsibility” model for child rearing, but unlike in the states, that caregiving
is done primarily by young immigrant women workers with few rights.
However, one in seven households have such a maid, which enables working
mothers to have more leisure time.
The United States, which was founded on freedom and equality, appears to
advocate independence of its women; however, important tax provisions put an
unfair burden on working mothers in bearing the responsibility of rearing and
educating children. Numerous tax policy changes could be made to truly
support its mothers in the workplace and at home. These would include
expanding the income tax base, making the system more progressive, adopting
the individual unit, and adopting more direct subsidies, such as those for child
care or preschool.